Traders work on the floor of the New York Stock Exchange May 5, 2014.BRENDAN MCDERMID/Reuters
The TSX gave back the small gains it had made earlier on positive earnings reports on Tuesday.
The S&P/TSX composite index slipped 3.16 points to 14,651.78.
The Canadian dollar was down 0.05 of a cent to 91.72 cents (U.S.).
U.S. indexes were mainly higher amid a disappointing showing in U.S. retail data.
The U.S. Commerce Department said retail sales rose just 0.1 per cent last month, after surging 1.5 per cent in March following a harsh winter that had curtailed shopping. Auto sales increased 0.6 per cent in April, and purchases at clothing stores were up 1.2 per cent. But most of those gains were offset by declines in spending at restaurants, online retailers, furniture and electronics stores.
The Dow Jones industrials climbed 17.21 points to 16,712.68, the Nasdaq slipped 1.18 points to 4,142.68 while the S&P 500 index improved by 2.29 points to 1,898.94.
DirecTV rose about one per cent in New York on reports that AT&T was close to completing a takeover of the satellite-television provider. The Wall Street Journal reported that a deal could be reached within two weeks, or sooner, and would value DirecTV at nearly $50-billion (U.S.).
In other M&A developments, Quebec-based Valeant Pharmaceuticals International Inc. said it plans to improve its offer for Botox-maker Allergan. The U.S. company on Monday rejected Valeant's $48-billion hostile takeover bid, saying it undervalued Allergan. Valeant said in a letter to Allergan shareholders that it will outline the improved offer during a webcast/conference call May 28. Valeant shares were $1.28 higher at $143.26.
Analysts say this merger and acquisition activity is a major reason why markets have done so well this year.
"I think it's up 80 per cent, its best year so far (since the financial crisis)," said Sid Mokhtari, market technician at CIBC World Markets.
"That basically shows that the sentiment of CEOs are generally good and optimistic."
Mokhtari said optimism about China is also supporting markets.
"A Chinese official has come out and admitted to what they call a new normal now, assuming slower growth for a protracted period of time," he said.
"The market wasn't sure where China was headed, now they've come out and said it and that has sparked some sort of an assumption that at least officials would take measures to boost growth."
On Tuesday, oil and gas producer Encana Corp. said quarterly cash flow nearly doubled to $1.09-billion (Canadian), or $1.48 per share and its shares gained 40 cents to $25.
RioCan Real Estate Investment Trust said that quarterly funds from operations rose two per cent to $127-million or 42 cents per unit. Its units were down five cents at $27.64.
Shares in home improvement retailer Rona Inc. added 14 cents to $11.07 as the company lost $16.6-million or 14 cents per share in the latest quarter, compared with a loss of $36.1-million or 30 cents per share a year ago. Revenue fell to $764.3-million, down from $832.9-million.
On the commodity markets, June crude in New York gained 70 cents to $101.29 (U.S.) a barrel and the energy sector was ahead 0.5 per cent.
The gold sector was up 0.32 per cent while June bullion edged up 70 cents to $1,296.50 an ounce.
The base metals sector was off 0.14 per cent as July copper slipped a penny at $3.14 after running up over two per cent Monday.