Greek woes, China data, sinks markets

The Toronto stock market was sharply lower Friday amid doubts as to when Greece will get a much-needed bailout in order to avoid bankruptcy.

The S&P TSX Composite Index approached midday Friday off 104.32 points to 12,393.62

The Canadian dollar scaled back 0.62 cents to 99.89 U.S., well below the heights above parity the loonie had enjoyed much of the week.

Sentiment was also depressed Friday morning by data showing that China's trade suffered its biggest decline in January since the 2008 financial crisis in a new sign of weak global demand and a slowing domestic economy.

China is a major buyer of iron ore, oil and other commodities and industrial components, meaning any downturn could hurt suppliers such as Canada, Australia, Brazil and South Africa.

Commodity prices retreated following the data.

The base metals sector led losers, as the March copper contract in New York dropped 12 cents to $3.86 U.S. a pound. Copper prices have charged ahead from around $3.43 U.S. at the first of the year, reflecting a string of positive economic data from the U.S. and hopes that the Chinese government would be able to relax lending requirements at banks to encourage economic growth.

China is the biggest consumer of the metal.

Teck Resources fell $1.03 to $39.76 while First Quantum Minerals dropped $1.11 to $20.72.

Uranium giant Cameco Corp. raised its net profits by nearly a third to $265 million or 67 cents a share on higher prices and production. Revenue jumped 45% to $977 million. Its shares dipped 33 cents to $23.03.

The energy sector fell as Suncor Energy lost 42 cents to $34.17 and Canadian Natural Resources declined 83 cents to $37.46.

A stronger American dollar also contributed to April gold dropping, pushing the gold sector down 1.59 per cent. Goldcorp Inc. faded 82 cents to $45.74.

A stronger greenback usually helps depress commodity prices, which are denominated in U.S. dollars, as it makes oil and metals more expensive for holders of other currencies.

The financials sector was also a major weight, while Bank of Montreal gave back 70 cents to $57.92 and Manulife Financial was down 35 cents to $11.53, extending losses from Thursday after the insurer delivered a quarterly loss.

The telecom sector was weak as Telus reported that fourth-quarter profits increased 4.9% to $237 million or 76 cents a share, two cents less than analyst expectations. Revenue increased 5.3% to $2.69 billion from $2.55 billion and its shares fell $1.12 to $56.09.

The industrials sector fell as Air Canada shares continued to take a beating, down 11 cents to 9.57% to $1.04 as it said it has reached a tentative agreement with its mechanics, baggage handlers, and cargo agents.

The deal came a day after the union representing the airline's pilots called for a strike vote and the carrier said it lost $249 million last year, leading to a 12% slide in the stock price.

There was some major acquisition activity in the resource sector.

Pulp producer Fibrek Inc. has struck a friendly deal to be acquired by Mercer International Inc. The Montreal-based pulp maker says the Mercer cash and share bid tops a $130 million offer by Resolute Forest Products, the former AbitibiBowater. Fibrek shares surged 16 cents or 14% to $1.29.

On matters economic, Statistics Canada reported that this country's merchandise trade surplus improved sharply to $2.7 billion in December from a revised $1.2-billion level in November.

Expectations for the December surplus had been for deterioration to $0.8 billion.

ON BAYSTREET

The TSX Venture Exchange fell 14.42 points to 1,650.40, while the Nasdaq Canada index dipped 3.56 points to 418.48

All 14 Toronto subgroups were lower to begin the day, weighed mostly by global base metals, down 2.1%, metals and mining, down 1.9%, and telecoms, sputtering 1.5%.

ON WALLSTREET

In New York, stocks dropped Friday, as investors grew concerned about the latest obstacle in Greece's ongoing debt saga.

The Dow Jones Industrials shed 117.04 points, off its lows of the day, to break for lunch at 12,773.40

The S&P 500 faded 9.39 points to 1,342.56, while the tech-rich Nasdaq slashed 19.58 points to 2,907.65

The selling in the market was broad. Oil, gold and copper fell more than 1%.

All 30 stocks in the Dow moved negative, with aluminum maker Alcoa and Bank of America losing the most ground.

Alcatel-Lucent shares spiked 14%, after the telecom equipment maker posted an annual profit for 2011 -- its first since Alcatel and Lucent merged in 2006.

LinkedIn shares jumped almost 9% Friday, a day after the professional networking site's fourth-quarter profit surged 30% and revenue more than doubled.

Barclays shares moved up nearly 3%. The London-based bank posted an unexpected loss for the fourth quarter, but it also cut its bonus pool by 25%. For employees at the investment bank, Barclays Capital, bonuses fell by almost a third and are capped at £65,000.

Shares of Activision Blizzard, maker of World of Warcraft and Call of Duty, slipped 3% even after the game maker beat fourth-quarter profit and sales estimates.

Nuance Communications' shares fell more than 14%, after the software developer reported earnings that missed analysts' expectations.

On the economic front, the December trade deficit for the U.S. expanded to $48.8 billion, from $47.1 billion U.S. the prior month.

Consumer sentiment dropped more sharply than expected in February. The February edition of the Michigan Consumer Sentiment Index fell to 72.5 from 75 last month. The index was expected to come in at 74.

In the afternoon, the Treasury Department's budget report for January will be released. The January Treasury budget report is expected to show a deficit of $40 billion.

Treasury prices for the 10-year note climbed, lowering yields to 1.97% from Thursday's 2.05%. Treasury prices and yields move in opposite directions.

Oil for February delivery fell $1.34 to $98.49 U.S. a barrel.

Gold futures for April delivery fell $26.70 to $1,712.30 U.S. an ounce.