TORONTO - The Toronto stock market was little changed Monday afternoon amid data showing an unexpectedly slow Canadian economy and confirmation that Spain is back in recession.

The S&P/TSX composite index inched 0.09 of a point lower to 12,237.66, supported by rising energy and tech stocks, while the TSX Venture Exchange slipped 0.74 of a point to 1,412.02.

Statistics Canada reported that gross domestic product declined 0.2 per cent during February. Economists had expected a 0.2 per cent rise during the month. The Canadian dollar was down 0.68 of a cent to 101.26 cents US as traders felt that signs of a weaker economy would delay any move by the Bank of Canada to raise interest rates.

U.S. markets were negative as the Dow Jones industrial average fell 39.17 points to 13,189.14.

The Nasdaq composite index shed 20.42 points to 3,048.78 and the S&P 500 index was off 7.43 points to 1,395.93.

Deteriorating conditions in Europe focused investor attention Monday as official data confirmed Spain is back in its second recession in three years as its economy shrank by 0.3 per cent in the first quarter following a similar decline in the previous three-month period.

The contraction in Spain is dimming hopes that the government will be able to cut its budget deficit as predicted, which could in turn spell higher borrowing rates as investors lose confidence.

The news wasn't a huge surprise to markets since it was thought that "the sovereign debt crisis would require such austerity measures that would basically cut into economic growth and that in and of itself would be enough to push the eurozone economy into recession," said Craig Fehr, Canadian markets strategist at Edward Jones in St. Louis.

"It's a downward spiral that comes from having to remove the government portion of GDP too early in a recovery."

Also, ratings agency Standard & Poor's on Friday downgraded Spain to just three notches above junk. And on Monday, the agency lowered its rating for 11 Spanish banks.

Investors are worried that Spain will not be able to support its banks, which are burdened with massive amounts of bad loans on an imploded property market.

Worries spread to North America where the TSX financial sector was down 0.4 per cent. National Bank (TSX:NA) gave back 57 cents to $76.70 while TD Bank (TSX:TD) dropped 35 cents to $82.62.

Metal prices improved with the May copper contract on the Nymex unchanged at US$3.83 a pound. But the base metals sector fell 1.15 per cent. First Quantum Minerals (TSX:FM) dropped 44 cents to $20.69 while Ivanhoe Mines (TSX:IVN) gave back 21 cents to $11.68.

The gold sector fell 0.63 per cent as June gold declined 60 cents to US$1,664.20 an ounce. Iamgold (TSX:IMG) faded seven cents to $12.19.

Goldcorp Inc. (TSX:G) has suspended construction of the El Morro gold-copper mine in Chile after the country's Supreme Court suspended the $3.9-billion project's environmental permit on Friday. The Supreme Court found Chile's environmental permitting authority must correct deficiencies identified by the Antofogasta Court of Appeals. Goldcorp shares lost 39 cents to $37.99.

Soft economic conditions in the U.S. also helped push oil prices lower Monday with the June crude contract on the New York Mercantile Exchange down 40 cents to US$104.53 a barrel while Cenovus Energy (TSX:CVE) declined 36 cents to $35.53.

Demand concerns rose after data on Friday showed that the U.S. economy grew at an annual rate of 2.2 per cent in the January-March quarter, compared with three per cent in the final quarter of 2011.

The energy sector was ahead 0.89 per cent with Canadian Natural Resources (TSX:CNQ) ahead 81 cents to $34.12.

Tech stocks also advanced with Research In Motion Ltd. (TSX:RIM) ahead 41 cents to $14.20.

The TSX is set to end April trading down about 150 points from the beginning of the month, leaving the main index up a slight 2.3 per cent year to date. That is in sharp contrast to the S&P 500, which has jumped more than 10 per cent so far in 2012.

But the Toronto market is heavily weighted on the resource side. The energy and materials sectors have suffered from softening economic conditions in emerging countries, particularly China, where the government has tried to engineer a soft landing for the economy in order to ease inflation pressures.

"We think that will continue to weigh on domestic markets in the very near term," added Fehr.

"But out view is that ultimately a lot of these high growth emerging markets will feed off of the improving growth out of the U.S. and other markets and when that happens, we can expect the Canadian market to participate to the upside."

Elsewhere on the corporate front, a former executive of Canadian engineering giant SNC-Lavalin (TSX:SNC) has been arrested in Switzerland. Riadh Ben Aissa is accused of fraud and corruption. He was the executive vice-president of construction, but parted ways with the company earlier this year along with another SNC executive. Swiss government spokeswoman Jacqueline Buhlman said the allegations are in connection with alleged business dealings in northern Africa, but wouldn't comment further. SNC shares were down 26 cents to $36.71.

Barnes & Noble Inc. and Microsoft Corp. are teaming up to create a new Barnes & Noble subsidiary that will house the digital and college businesses of the bookseller and include a Nook application for Windows 8. The companies said Monday that they are exploring separating those businesses entirely. That could mean a stock offering, sale, or other deal could happen and Barnes & Noble shares soared 61.11 per cent to US$22.04.