A strong rally on the Toronto stock market stalled late morning Thursday despite a move by China to boost its flagging economy.The S&P/TSX composite index had jumped almost 100 points amid an interest rate cut by China’s central bank and hopes that European officials are co-ordinating help for Spain’s troubled banking sector.But by late morning the index was down 23.58 points to 11,609.82 after jumping about 300 points in the last two days. The market was also pressured by a sharp drop in gold stocks as bullion prices declined. The TSX Venture Exchange slipped 7.22 points to 1,295.42.The Canadian dollar gained 0.37 of a cent to 97.66 cents US.U.S. markets were positive, but off the best levels of the session with the Dow Jones industrial average up 61.49 points to 12,476.28, the Nasdaq composite index was off 0.15 of a point to 2,844.57 and the S&P 500 index gained 2.8 points to 1,317.93.Indexes slipped as Federal Reserve chairman Ben Bernanke told Congress that while the Fed is prepared to take further steps to boost the U.S. economy if it weakens, nothing is imminent.“Bernanke is saying simply, we’ll act if we have to if we don’t have to, we won’t,” said Allan Small, senior adviser at DWM Securities. “I think that should be enough for these markets because that tells you that there’s this backstop. That’s the way I look at it, but the market wants the goods. But if (the Fed doesn’t deliver), who knows if this is just a temporary bounce.”The Chinese central bank cut its benchmark lending rate for the first time in nearly four years as it tried to reverse a sharp economic slowdown. The interest rate on a one-year loan will be reduced by a quarter percentage point to 6.31 per cent effective Friday. Also, banks will reportedly be allowed to offer a 20 per cent discount from the benchmark rate.China has been a major force behind the economic recovery, driving prices for commodities and resource stocks on the Toronto market. But, those stock prices have taken a beating over the last three months as the eurozone debt crisis has worsened and the Chinese economy has slowed.Helping sentiment Thursday were reports that European Union officials have been exploring ways to help Spain’s fragile banking sector without imposing strict conditions on the Spanish government. The Financial Times said Wednesday that such a move could make Spanish officials less reluctant to accept international assistance. Spain’s banks are saddled with billions in soured property investments following the bursting of the country’s real estate bubble.The gold sector was the biggest decliner, down about four per cent, as bullion prices slipped $36.50 to US$1,597.70 an ounce. Barrick Gold Corp. (TSX:ABX) fell $2.26 to C$39.27 and Goldcorp Inc. (TSX:G) faded $1.79 to $39.51.Outside of the gold sector, the market was supported by energy and mining stocks with the July crude contract on the New York Mercantile Exchange up 30 cents to US$85.32 a barrel. The energy sector rose a slight 0.15 per cent and Cenovus Energy (TSX:CVE) rose 75 cents to $33.22 while Canadian Natural Resources (TSX:CNQ) fell 36 cents to $29.05.The base metals group ran ahead one per cent while the July copper contract lost early gains and was unchanged at US$3.38 a pound after running up nine cents Wednesday. Teck Resources (TSX:TCK.B) moved ahead 73 cents to $33.04.Railroad stocks rose alongside miners with Canadian National Railways (TSX:CNR) up 95 cents to $84.14.The financials sector improved by 0.7 per cent and Manulife Financial (TSX:MFC) climbed 13 cents to $11.16.Retailer Lululemon (TSX:LLL) (NASDAQ:LULU) was a major decliner as the company’s outlook for the year fell short of expectations. Lululemon’s stock fell 9.3 per cent to $65.37.The TSX had racked up a strong triple-digit gain for a second session Wednesday as traders continued to pick up stocks that have been beaten down amid concern about the potential global impact of the European Union’s drawn-out debt crisis. Buyers moved in following a drop of almost two per cent last week that left the market down about 10 per cent from the highs of 2012 in late February.European bourses were higher with London’s FTSE 100 index ahead 1.08 per cent, Frankfurt’s DAX gained 1.01 per cent and the Paris CAC 40 advanced 0.74 per cent.In other corporate news, shares in telecom technology company Sandvine Corp. (TSX:SVC) tumbled 14.7 per cent to $1.21 as the company warned that it now expects between $18 million and $18.5 million of revenue in its just-ended second quarter, about $4 million below expectations.