Markets dip sharply

Canada's resource heavy main stock index tumbled on Friday, as commodity prices fell after euro-zone finance ministers, unimpressed by Greek economic reforms, demanded further measures to sign off on a second bailout package.

The S&P TSX Composite Index began Friday off 147.21 points, or 1.2%, to 12,350.73

The Canadian dollar scaled back 0.59 cents to 99.91 U.S., well below the heights above parity the loonie had enjoyed much of the week.

Among Canadian stocks to watch, Telus Corp. whose fourth-quarter profit rose 5%, helped by the expansion of its Optik TV product while strong smartphone growth helped sales but hampered earnings.

Uranium whiz Cameco Corp. reported higher quarterly earnings on Thursday helped by higher profits from its nuclear business.

Base metal miner Inmet Mining said its fourth-quarter profit fell 67%, on the back of lower copper and zinc prices.

Centerra Gold reported a 36% increase in the size of its measured and indicated gold resources on Thursday, driven by exploration success at its Kumtor mine in the Kyrgyz Republic and other projects in Russia and Mongolia.

Rare Element Resources reported a wider quarterly loss on Thursday as it ramped up drilling at its Bear Lodge project in the United States and wrote down a rare earth property in Canada.

Mobile modem manufacturer Sierra Wireless posted a fourth straight quarterly loss on Thursday and revenue also fell from a year earlier as sales to former customers Barnes & Noble and Clearwire evaporated.

Talison Lithium reported a marginal rise in quarterly profit due to declining costs, but revenue fell almost a third on shipment delays.

Pacific Wildcat Resources said further drilling at its Kenyan mining project near Mombasa had established larger reserves of niobium and rare earth than earlier projected.

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 a deterioration to $0.8 billion.

ON BAYSTREET

The TSX Venture Exchange fell 15.44 points to 1,649.38, while the Nasdaq Canada index dipped 6.27 points to 415.77

All 14 Toronto subgroups were lower to begin the day, weighed mostly by metals and mining, off 2.8%, global base metals, down 2.4%, while materials crumbled 1.8%.

ON WALLSTREET

In New York, stocks were set to decline at the open Friday as investors grew concerned about the latest obstacle in Greece's ongoing debt saga.

The Dow Jones Industrials shed 128.28 points, or 1%, to begin the last session of the week at 12,762.20

The S&P 500 faded 10.50 points to 1,341.45, while the tech-rich Nasdaq slashed 27.61 points to 2,899.62

Alcatel-Lucent shares spiked, 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% in pre-market trading Friday, a day after the professional networking site's fourth-quarter profit surged 30% and revenue more than doubled.

Barclays shares were also higher. 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, rose after the game maker beat fourth-quarter profit and sales estimates.

The fresh bout of worries came after euro-zone finance ministers said that the new Greek austerity deal does not go far enough. The finance ministers said they would need to see more spending cuts before signing off on a new €130-billion bailout, which is key to the debt-laden country making its payment on a €14.5-billion bond redemption next month and avoiding default.

Specifically, Juncker said the reform package needs to be approved by the Greek parliament this weekend, and Greece's leaders need to pledge they'll continue to implement the measures after elections in April. He also said that Greece must cut an additional €325 million from its "structural expenditures" in 2012.

If Greece meets those conditions, a bailout package could be signed as early as next week, when euro-zone finance ministers are due to meet again.

Meanwhile, Greece is also working to finalize a deal with its private-sector creditors to write down a portion of its debt.

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.

A report on consumer sentiment is due later in the morning. In the afternoon, the Treasury Department's budget report for January will be released.

The February edition of the Michigan Consumer Sentiment Index is expected to come in at 74, down from 75 last month, while the January Treasury budget report is expected to show a deficit of $40 billion U.S.

Treasury prices for the 10-year note jumped, lowering yields to 1.98% from Thursday's 2.05%. Treasury prices and yields move in opposite directions.

Oil for February delivery fell $2.23 to $97.62 U.S. a barrel.

Gold futures for April delivery fell $32 to $1,709.20 U.S. an ounce.