TORONTO - The Toronto stock market was lower at the end of a losing week as more signs emerged that the European government debt crisis is worsening.

The S&P/TSX composite index lost 47.99 points to 11,437.33 while the TSX Venture Exchange edged 4.68 points lower to 1,508.42. Worries about Europe have carved about 400 points from the main Toronto index this past week.

"This week has been all about Europe and we're down because of Europe," said Gareth Watson, vice-president investment management and research at Richardson GMP Ltd.

The Canadian dollar was down 0.23 of a cent to 95.17 cents US.

Italy had to pay an average yield of 7.814 per cent to raise C2 billion in two-year bills, much higher than the 4.628 per cent it had to pay in the previous auction in October. Higher yields are an indication of uncertainty that the debts will be repaid.

Raising C8 billion for six months proved exorbitantly expensive. The yield for this auction spiked to 6.504 per cent, nearly double the 3.535 per cent rate in the last equivalent auction last month.

Traders returned to U.S. markets for a shortened session following the Thanksgiving holiday.

New York markets closed lower with the Dow Jones industrial index down 25.77 points to 11,231.78, the Nasdaq composite index shed 18.57 points to 2,441.51 while the S&P 500 index declined 3.12 points to 1,158.67.

U.S. markets had earlier found support from a positive start to Black Friday, the kickoff of the retail holiday shopping season in the U.S.

"It would appear at least the Black Friday sales are hopefully going to be meeting the expectations of what the street is looking for this year," added Watson.

Early signs pointed to bigger crowds at U.S. malls and stores as retailers like Macy's and Target opened their doors at midnight. Toys "R" Us and a few other stores that opened on Thanksgiving Day were also filled with shoppers.

But worries about Europe trumped that early enthusiasm going into the weekend as Italy's borrowing rates in the markets skyrocketed in the wake of the auctions, with the 10-year yield spiking 0.34 of a percentage point to 7.3 per cent.

That is above the seven per cent threshold that is widely considered unsustainable and eventually forced Greece, Ireland and Portugal had to seek financial bailouts.

However, with debts of around C1.9 trillion, or a huge 120 per cent of its economic output, Italy is considered too big to bail out.

Markets have been in a deep funk for weeks over the failure of eurozone leaders to come up with a comprehensive fix for the debt crisis, which threatens a fragile global recovery, the region's financial system and the euro itself.

There have been calls for the European Central Bank to deal with the debt crisis by declaring itself lender of last resort and printing money to buy the bonds of debt-laden eurozone countries. But both the ECB and the German government are loath to do that, warning that it lets the more profligate countries off the hook for their bad practices.

For the same reason, Germany has opposed the use of eurobonds which would be backed by the eurozone's 17-member countries.

The TSX energy sector fell 0.83 per cent while the January crude contract on the New York Mercantile Exchange gained 60 cents to US$96.77 a barrel. Suncor Energy (TSX:SU) fell 58 cents to $28.17 while Cenovus Energy (TSX:CVE) was down 33 cents to $29.99.

The TSX gold sector was down 0.6 per cent even as the December bullion contract moved down $10.20 to US$1,685.70 an ounce. Goldcorp Inc. (TSX:G) faded 37 cents to $49.90 while Iamgold (TSX:IMG) faded 45 cents to $18.98.

The base metals component fell 0.93 per cent with the December copper contract in New York off a penny to US$3.27 a pound. Teck Resources (TSX:TCK.B) gave back 73 cents to $32.59 and Quadra FNX Mining (TSX:QUX) moved down 10 cents to $9.41.

The financial sector fell 0.2 per cent with Royal Bank (TSX:RY) down 48 cents to $43.24 and Sun Life Financial (TSX:SLF) fell 22 cents to $18.20.

Tech stocks were also a drag as Research In Motion Ltd. (TSX:RIM) fell 20 cents to $16.80.

European bourses were higher as London's FTSE 100 index was up 0.72 per cent, Frankfurt's DAX was up 1.19 per cent and the Paris CAC 40 gained 1.23 per cent.