TORONTO - The Toronto stock market gave up an early solid gain to close little changed Wednesday after the U.S. Federal Reserve lowered its estimate of U.S. economic growth for this year.

The S&P/TSX composite index was 2.76 points lower at 13,060.56 after higher oil and gold prices helped push the index up almost 100 points earlier in the session while the TSX Venture Exchange rose 23.84 points to 1,935.9.

The Canadian dollar dipped 0.08 of a cent to 102.76 cents US.

The Fed now believes that the economy will grow between 2.7 per cent and 2.9 per cent this year, down from its April estimate of between 3.1 per cent and 3.3 per cent.

The change in expectations was announced after the Fed said it was keeping its key interest rate near zero as the recovery continues to unfold slower than hoped.

The Fed added that the pace of recovery was "expected to pick up in coming quarters" as factors holding back the economy are temporary.

"What I heard very clearly was, the economy is weak, we will be on the sidelines in the terms of at least interest rate policy and monetary policy for some time," said John Stephenson, vice president and portfolio manager at First Asset Funds.

"We think that things are very fragile and we see a world of risk out there."

A recent soft patch in the American economy, along with worries about Greek default on the government's huge debt, has depressed markets recently, with the TSX losing more than two per cent in each of the last three weeks.

Fed chairman Ben Bernanke later told a news conference that immediate sharp spending cuts in the U.S., as demanded by many Republican politicians, would not create jobs.

Meanwhile, traders felt a bit more confident that Greece can avoid a default after Prime Minister George Papandreou's government won a confidence vote early Wednesday.

Investors hope the win paves the way for the passage of another batch of austerity measures in a vote next Tuesday. The Greek Parliament needs to pass measures for additional budget cuts, new taxes and to back a privatization program so the country can get its hands on euro 12 billion of rescue loans to stave off a disastrous potential default by mid-July.

But analysts were skeptical about how long this more positive outlook would last.

"It will dissipate because then they have to debate the actual austerity measures to get passed and that will not happen easily," added Stephenson.

"There's a little bit of a ray of hope but the task is so daunting."

On Wednesday, investors bought up defensive sectors with gold stocks ahead as nervous investors pushed the August bullion contract in New York up for a seventh session, gaining $7 to US$1,553.40 an ounce. Barrick Gold Corp. (TSX:ABX) rose 61 cents to C$43.57 and Goldcorp Inc. (TSX:G) gained 97 cents to C$48.14.

The consumer staples sector was also positive, up 0.53 per cent with Shoppers Drug Mart (TSX:SC) ahead 40 cents to $40.77 while Alimentation Couche Tard Inc. (TSX:ATD.B) gained 28 cents to $27.32.

The energy sector was ahead 0.12 per cent as the August crude contract on the New York Mercantile Exchange was up $1.24 at US$95.41 a barrel. Imperial Oil (TSX:IMO) shed 15 cents to C$44.02.

Oil prices advanced after the U.S. Energy Information Administration reported a decline of 1.7 million barrels in U.S. crude supplies last week. The decline was larger than the 81,000-barrel fall reported by the American Petroleum Institute late Tuesday.

The base metals sector fell 0.66 per cent as the July copper contract on the Nymex was unchanged at US$4.09 a pound. Teck Resources (TSX:TCK.B) lost $1.29 to C$44.18 while HudBay Minerals (TSX:HBM) rose 17 cents to $13.21.

The industrials sector was the biggest decliner with Bombardier Inc. (TSX:BBD.B) off 34 cents at $6.69. The transportation giant downplayed an announcement Wednesday by Republic Airways, the largest buyer of its new CSeries aircraft, to become the launch customer for Airbus' rival A319neo. Bombardier says it has a firm order from Republic and that different aircraft types co-exist in airlines.

American markets also fell with the Dow Jones industrial average down 80.34 points at 12,109.67.

The Nasdaq composite index was down 18.07 points to 2,669.19 while the S&P 500 index slipped 8.38 points to 1,287.14.

In other corporate news, FedEx Corp. says quarterly earnings rose 33 per cent to US$558 million or $1.75 a share as higher surcharges helped offset the rising cost of fuel. The Memphis, Tenn., package delivery company beat expectations by two cents a share while revenue increased 12 per cent to US$10.55 billion. Its shares rose 2.6 per cent to US$91.44.

TMX Group Inc. gained 45 cents to C$44.25 as it said it will pay a special cash dividend of $4 per share when it closes its merger with the London Stock Exchange Group, sweetening the deal for shareholders of the Canadian stock market operator. TMX said Wednesday the combined company will also pay a regular dividend after the merger that is at least equivalent to the current quarterly rate of 40 cents per TMX share.

AGF Management Ltd. (TSX:AGF.B) said higher investment management revenue helped it to gain almost 19 per cent in second-quarter net profits to $32.7 million. The Toronto-based global wealth management company also hiked its quarterly dividend by almost four per cent. AGF shares were down eight cents at $18.54.