Feb. 12, 2010 (Baystreet.ca) --
Canadian stocks struggled to sustain gains accumulated in the past three sessions Friday morning on easing commodity prices and worries over the euro zone.
The S&P/TSX Composite Index stubbed its toes out of the gate, losing 90.03 points in the first half-hour to 11, 345.46.
Even as traders were awaiting more details on the European rescue plans for the Greece, news that growth in the German economy stalled in the fourth quarter of 2009 may weigh on the sentiment.
Commodity prices slipped Friday morning after China hiked its reserve ratio for banks, for a second time in a month, to cool off its economy. Prices for oil and bullion both slipped.
In corporate news, Oil and natural gas explorer Niko Resources swung to profit, reporting third-quarter net income of $0.29 per share, as against a loss of $0.04 in the same quarter last year.
Silver explorer Silver Standard Resources said it would raise approximately $100 million through a public offering of its common shares.
Health Science and Technology company Afexa Life Sciences reported that first-quarter net earnings surged $0.06 per share, from $0.03 per share last year.
Telecommunications service provider TELUS Corp. said its fourth-quarter net income decreased $0.49 per share from $0.90 in the prior year quarter.
Contract drilling operator Precision Drilling Trust reported fourth-quarter net loss of $0.09 per unit, compared to net income of $0.66 per unit last year.
In brokerage updates, Royal Bank of Canada upped its rating on Research In Motion to "top pick" from an "outperform". RBC upped Teck Resources rating to "outperform" from "sector perform"
In economic news, Statistics Canada said New Motor Vehicle Sales increased 2.6% to 128,663 units in December, helped by higher sales in North American-built passengers cars.
The Canadian dollar decreased 0.49 cents to 94.68 cents U.S.
ON BAYSTREET
All 14 TSX subgroups were lower at the outset. Biggest losers were the global base metals sector, off 3.1%, metals and mining not far behind at 2.8% and gold skidded 2.4%.
The TSX Venture Exchange stumbled 8.21 points to 1,484.46, while the Nasdaq Canada index moved backward 0.49 points to 739.92.
ON WALLSTREET
In New York, stocks tumbled at Friday's open after China's bid to limit bank loans and slower-than-expected European growth raised worries about the strength of any global economic recovery.
The Dow Jones industrial average fell back 142.01 points, or 1.4%, to begin the session at 10,002.18. The S&P 500 index staggered 14.28 points to 1,064.19 and the Nasdaq composite backslid 23.11 points to 2,154.30.
Experts said that tightening in Chinese banking policy overshadowed the news coming out of another economic powerhouse, Germany, that its gross domestic product had a stagnant fourth quarter.
But they also said the concerns over debt problems in Greece seem to be subsiding.
Wall Street rallied Thursday after the European Union promised to help Greece with its budget woes. The Dow gained 106 points, or 1%. The S&P 500 and Nasdaq composite both added 1.4%.
The People's Bank of China said, on its Web site, that it has raised the reserve requirement ratio for depository financial institutions by half of one percentage point. This means that banks must have greater reserves to hold customer deposits, a way of tightening money supply in an effort to control inflation that also limits growth.
This is the second time this year that China's central bank has raised the reserve requirement ratio.
European Union members meeting in Brussels, Belgium Thursday said Greece must do whatever is necessary to cut its huge budget deficit and that the group would be prepared to step in if needed.
In recent weeks, Greece's proposals to save money -- including cutting wages and raising the retirement age -- have prompted a series of worker strikes.
Although Greece's impact is small, the nation's financial problems has sparked fears of a broader debt crisis in Europe with Portugal, Spain, Ireland and Italy among the other euro zone nations seen as having growing debt problems.
U.S. investors have been trying to gauge what kind of impact such a crisis would have on financial institutions as well as the still-fragile global economic recovery.
Meanwhile, a report showed that euro zone GDP growth in the fourth quarter was 0.1%, short of the 0.3% economists were expecting.
Economically speaking, investors also kept an eye on a stronger-than-expected report on retail sales.
The report on January retail sales, delayed by this week's snowstorms in Washington, showed that sales jumped 0.5%. Excluding automobiles, sales jumped 0.6%.
Retail sales were expected to have increased by 0.3% in January, according to a consensus of economist opinion compiled by Briefing.com. Retail sales, without automobiles, were expected to have increased 0.5% last month.
After U.S. markets open, a reading on business inventories is due out, as is the University of Michigan's survey of consumer sentiment.
The B shares of Warren Buffett's Berkshire Hathaway will join the Standard & Poor's 500 index after the close of trading Friday. The shares could get a boost, as money managers who run index funds tied to the blue-chip index will have to buy it.
Treasury prices jumped, thus lowering the yield on the 10-year note to 3.68%, from 3.72% late Thursday. Treasury prices and yields move in opposite directions.
The price of a barrel of oil fell $1.90 cents to $73.38 U.S.
Gold prices swooned $16 to $1,079 U.S.
