Nearly all of the TSX's 10 main groups were lower, led down by oil and gas issues, as weaker German industrial output in November had traders nervous about a slowdown in Europe's powerhouse economy. TransCanada Corp led the sector's declines, falling 1.4 percent to C$43.11. The Toronto Stock Exchange's S&P/TSX composite index was down 12.55 points, or 0.1 percent, at 12,176.09. Investors drew little inspiration from a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy, who have not yet been able to get their euro zone counterparts to agree on a new fiscal pact that is due to be signed on March 1. "(The European debt crisis) has done too much damage from a technical perspective so it needs more work other than just rhetoric," said Sid Mokhtari, market technician and director, institutional equity research, CIBC World Markets. Other euro zone data added to the gloom, with November retail sales down 0.8 percent and unemployment rising for a seventh consecutive month. Financials, were again buffeted by the negative European headwinds, with Bank of Nova Scotia sliding 0.5 percent to C$51.18. Gold miners helped curb the broader retreat, rising 0.6 percent as US gold futures for February were up $1 an ounce at $1,617.90 and spot gold rebounded from earlier lows. Iamgold Corp was the biggest gainer, rising 2.3 percent to C$17.42. The TSX got off to a solid start in the first week of 2012, gaining almost 2 percent thanks to a slew of positive US economic news. On Friday, a US data showed a better than expected rise in private sector hiring in December and a drop in the unemployment rate to its lowest level in almost three years. On Monday, the optimism continued as US auto sales are expected to rise as much as 9 percent, analysts and executives said at the Detroit auto show. Over the last few months, the relative health of the US economy has helped distract investors from the grim European outlook, but that may change should conditions worsen oversees, said Mokhtari. "Maybe the world is focusing too much on the economic improvement in the US and dismissing the worsening economic behavior in other parts of the world," said Mokhtari. "Either the world needs to come back nicely or the US will catch down with the world." Investors will be looking for further positives news as US earnings season kicks off on Monday when Alcoa Inc, the largest US aluminum producer, reports results after the bell. Canadian companies don't start to report earnings until next week. In individual company news, Lululemon Athletica Inc's shares slipped more than 1 percent to C$54.53 after the yogawear retailer said on Friday that founder Chip Wilson will step down as chief innovation and branding officer on Jan. 29, but stay on as chairman of the board.