North American stock markets closed lower on the first day of trading after the long weekend Tuesday, dragged down by general pessimism about the global economy.

The Canadian dollar was trading more than half a cent lower to 101.05 cents US when stock markets closed Tuesday. It had earliest traded below the 101 cents US level, the first time it had done so in almost a month.

The S&P/TSX Composite Index in Toronto closed 83 points lower to 12,518 on Tuesday.

Its counterpart in New York fared even worse, falling 101 points to 11,139. There did not appear to be any new data that sparked the sell-off — just continuing pessimism over the global economy.

"It's residual, it's not necessarily anything new that has come out, but there's just further data to indicate the economy is barely reading a pulse in the United States," said Philip Petursson, managing director at Manulife Asset Management.

"We have absolutely no leadership in terms of any solutions being provided by politicians in Europe or the United States to try and solve any of the problems, so this is all catch-up."

Indeed, markets could have been buoyed by the Institute of Supply Management release of a report on the U.S. service sector Tuesday morning showing that service firms grew at a slightly faster pace in August compared to July.

But investors have been watching as Europe's debt problems continue to create unease. North American bourses were closed for the Labour Day holiday on Monday, but stock exchanges elsewhere in the world were all lower, a continuing reaction to Friday's news that the U.S. economy created zero jobs last month.

It was the first time since since the Second World War that the world's largest economy has put up a flat showing on the jobs front.

Oil was flat on Monday, down 2 cents US to $86.43 a barrel in New York.

Gold was just about the only asset that moved higher, with the December bullion contract gaining $5 to trade at $1,881 an ounce.

Gold tends to perform well during times of uncertainty and volatility in the economy.

With files from The Canadian Press