TORONTO -- Stock markets were lower in lacklustre trading yesterday afternoon as a new report showing increased spending by U.S. shoppers failed to impress. Meanwhile, Air Canada shares plunged after the airline acknowledged its stock will likely be worthless after restructuring.

Air Canada shares were down 70 cents to $1.14. The insolvent carrier confirmed late Wednesday there is unlikely to be any value for shareholders after restructuring.

CEO Robert Milton also said revenue this year will drop more than $1 billion, mostly because of the impact of SARS.

Canadian investors had another reason to keep on the sidelines after Bank of Canada governor David Dodge predicted a reduction in near-term economic growth in Canada, blaming the jump in the value of the Canadian dollar for some of the strain on the economy.

Toronto's S&P/TSX composite index lost 4.6 points to 7,096.17 after climbing 58 points Wednesday.

Forestry giant Abitibi-Consolidated's shares slid 78 cents to $9.06 after it said it is slashing its dividend by 75 per cent.