TORONTO - The Toronto stock market closed modestly higher Monday as the latest reading on U.S. manufacturing showed slowing expansion and the Chinese central bank moved to spark that country's slowing economy through a rate cut.

The S&P/TSX composite index gained 29.71 points to 15,264.05, weighed down by the energy and gold sectors. The Canadian dollar declined 0.20 of a U.S. cent to 79.78 cents.

U.S. indexes were higher as the Institute for Supply Management's manufacturing index dropped to 52.9 from 53.5, roughly in line with expectations. Among other things, the reading reflected a stronger American currency and lower oil prices, which have cut capital spending plans by energy companies, as well as the recently ended labour disruptions at West Coast ports that impeded supply chains.

"The U.S. economy is showing the most amount of momentum," said Craig Fehr, a Canadian markets specialist at Edward Jones in St. Louis, Mo.

"But even the data there is going to continue to be mixed. It’s indicative of the fact that some of the challenges that exist in economies around the world are going to continue to weigh on some of the important trends. Things like (purchasing managers) indicators are all going to continue to reflect these global balances."

It was a notable day in New York as the Dow Jones Industrials and the S&P 500 closed at record highs while the Nasdaq closed above 5,000 for the first time since 2000.

The Dow industrials jumped 155.93 points to 18,288.63 and the S&P 500 index climbed 12.89 points to 2,117.39. The Nasdaq rose 44.57 points to 5,008.1.

There was relief on markets after the People's Bank of China on Saturday cut its key rate by a quarter point to 5.35 per cent, the lowest in over five years, as the government aims to keep to its growth target of around seven per cent.

The rate cut came as official surveys of purchasing managers showed a contraction in the manufacturing sector for a second month in a row. The official manufacturing PMI came in at 49.9 in February, up slightly from 49.8 in January.

However, the relief didn't translate into gains as the rate cut was likely already priced in, as witnessed by last week's four per cent jump in copper prices.

"We started to get that sniffed out last week in terms of the move in some commodities," Fehr said. "Copper obviously has, for a very long time, been a key proxy for measuring enthusiasm if not growth in the Chinese economy."

"I think at this point, more aggressive policy action, not only by (the Chinese central bank) but the major central banks around the world, is really fully baked in by the market at this point."

On Monday, May copper edged a penny higher to US$2.70 a pound and the base metals group fell 0.9 per cent.

The energy sector was down 0.75 per cent with oil prices volatile. Prices returned to the negative column during the afternoon and the April contract slipped 17 cents to US$49.59 a barrel.

Falling prices pushed the gold sector down 2.2 per cent with April bullion down $4.90 at US$1,208.20 an ounce.

Tech stocks and consumer discretionary stocks provided lift for the TSX.

It's a heavy week for key U.S. data with investors also taking in vehicle sales, the ISM's non-manufacturing index, factory orders and the government's employment report at the end of the week.

News from © The Canadian Press, 2015