TORONTO – Mining and energy stocks led the way to a lower session on the Toronto stock market Friday amid falling prices for oil and copper.

The S&P/TSX composite index fell 53.13 points to 12,693.42.

Falling commodity prices punished the Canadian dollar even as economic growth data came in better than expected. The loonie was down 0.39 of a cent to 96.7 cents US as Statistics Canada reported that the economy expanded at an annualized rate of 2.5 per cent during the first quarter, which was higher than the 2.3 per cent reading that had been expected.

The agency also revised growth for last year’s fourth quarter higher, saying GDP rose at an annualized rate of 0.9 per cent, versus the original reading of 0.6 per cent.

Statistics Canada also said that GDP growth for March came in at 0.2 per cent, higher than the 0.1 per cent increase that economists had expected.

U.S. indexes turned higher as traders balanced a disappointing report on personal spending data with a stronger than expected showing from the manufacturing sector and encouraging consumer confidence numbers.

The Dow Jones industrials gained 55.71 points to 15,380.24, the Nasdaq climbed 7.35 points to 3,498.65 while the S&P 500 index was up 3.31 points to 1,657.72.

Americans cut back on spending in April after their income failed to grow.

The U.S. Commerce Department says American consumer spending dropped a seasonally adjusted 0.2 per cent in April, the most since last May. That follows a 0.1 per cent increase in March.

Income was unchanged last month, after a 0.3 per cent rise in March.

But a key reading on manufacturing in the U.S. Midwest came in much better than expected. The Chicago Purchasing Managers Index for May came in at 58.7, higher than the 49.9 reading that had been expected and a big improvement from the 3.5-year low of 49 posted in April. Any reading above 50 indicates expansion.

“The Chicago PMI is normally more stable and less prone to violent swings than other regional surveys, and so the increase is encouraging sign particularly with many other surveys showing continued weakness,” said CIBC World Markets senior economist Andrew Grantham.

“The detail showed all components improving, with a particularly strong increase in the production index.”

Other data showed that the final reading of the University of Michigan’s consumer sentiment survey for May edged up to 83.8, the best level in more than six years.

Commodity prices were weak with July crude on the New York Mercantile Exchange down $1.25 to US$92.36 a barrel. The energy sector was down 0.35 per cent and Canadian Natural Resources (TSX:CNQ) stepped back 43 cents to C$31.51.

The base metals sector dropped 1.6 per cent while July copper edged three cents lower to US$3.29 a pound. Teck Resources (TSX:TCK.B) lost 42 cents to C$28.17.

June gold fell $21 to US$1,390.50 an ounce, taking the gold sector down 1.2 per cent. Goldcorp Inc. (TSX:G) faded 36 cents to C$29.89.

There was also acquisition activity in the mining sector.

New Gold Inc. (TSX:NGD) has reached a friendly deal to acquire Rainy River Resources Ltd. (TSX:RR), which has an advanced gold project in Ontario. The offer values Rainy River at about $310 million, net of its cash balance.

New Gold is offering $3.83 per share to Rainy River shareholders. New Gold shares declined 61 cents to $7.05 while Rainy River surged 95 cents to $3.65.

Hundreds of protesters attempted to storm a Canadian gold mine office in eastern Kyrgyzstan Friday, near the village of Barskoon. The incident furthered a protest that began earlier this week to demand that the mine, operated by Toronto-based Centerra Gold (TSX:CG), be nationalized and provide more social benefits in the impoverished nation. The mine is the largest foreign-owned gold mine in the former Soviet Union. Centerra shares were 14 cents lower to $4.01.

Financials were also a weight as CIBC (TSX:CM) shed 80 cents to $78.42 after investment banking firm KBW cut its price target to $76. It cited a potential for lower earnings and risk from the company’s Aeroplan agreement with Aimia. The agreement is set to expire at the end of the year.

Bank of Nova Scotia (TSX:BNS) says Rick Waugh will retire as chief executive officer on Nov. 1, after a decade in the role. The new CEO will be Brian Porter, who has been president of the bank since last November. Scotiabank shares edged 32 cents lower to $58.91.

Canadian National Railway (TSX:CNR) was also in focus after JPMorgan Chase upgraded its stock to neutral from underweight with a target price of $110. Its shares gained 44 cents to $106.40 but the stock is still up about 30 per cent from its 52-week low.

Trading has been volatile this week amid signs of slowing growth in China and doubts about how long the U.S. Federal Reserve will carry on with its program of quantitative easing. The so-called QE3 involves the Fed buying up US$85 billion of bonds every month to keep long term rates low and encourage lending.

But U.S. indexes has charged ahead strongly during May, carrying on a rally that has gone on non-stop since late last year. For this month alone, the Dow industrial average has surged over three per cent, leaving the blue chip barometer up 17 per cent year to date, prompting speculation that the market is vulnerable to some profit taking.