The Toronto stock market gave up early gains late morning Wednesday with commodity prices losing early momentum.
Meanwhile, traders hoped that Greece is close to arriving at a deal that will see it get a crucial second bailout to stave off bankruptcy.
The S&P/TSX composite index lost 19.19 points to 12,493.23 while the TSX Venture Exchange was down 1.33 points to 1,662.01. The Canadian dollar declined 0.16 of a cent to 100.36 cents US, down from early highs at the U.S. dollar firmed.
U.S. markets also deteriorated with the Dow Jones industrial average down 50.82 points to 12,827.38. The Nasdaq composite index shed 8.48 points to 2,895.6 while the S&P 500 index dipped 3.93 points to 1,343.12.
Greece has been kept solvent for the last two years by 110-billion euros in international rescue loans. But it needs to get its hands on another C130 billion. Otherwise, it will not have enough money to pay off a big bond redemption on March 20.
A default on the country's massive debts would create havoc in the financial system. However, in order to get the money, the country's coalition leaders must agree on a new slate of tough austerity measures.
On Wednesday, the leaders held talks with Greece's prime minister to review a draft deal on steep cutbacks demanded by creditors.
Greece has already accepted a demand to fire up to 15,000 workers in the public sector 2012, but is under pressure to impose deeper cuts, including reductions in pension payments and the minimum wage.
Hopes for a resolution to the Greece issue were raised after The Wall Street Journal said that the European Central Bank is prepared to contribute to lightening Greece's debt burden. According to the report, the ECB would essentially give up on profits that it stands to gain on its Greek bond holdings by handing them over to the European bailout fund, which then will sell them back to Greece. Athens would gain billions in the deal.
However, Dow Jones Newswires later reported that the ECB may hold off on helping Greece until after other key elements of its ongoing debt negotiations fall into place.
The TSX energy sector moved into the red, down 0.5 per cent while oil prices moved off early levels after the U.S. Energy Information Administration reported a small rise in crude inventories last week. The March crude contract on the New York Mercantile Exchange rose 35 cents to US$98.75. Prices had earlier moved as high as US$100.09 after the American Petroleum Institute said Tuesday that crude inventories fell by 4.5 million barrels last week.
Canadian Natural Resources (TSX:CNQ) was down 66 cents to $37.86 and Talisman Energy (TSX:TLM) lost seven cents to $12.60.
The base metals group drifted 0.22 per cent lower as the March copper contract in New York erased gains from earlier in the morning, up one cent to US$3.89 a pound. Teck Resources (TSX:TCK.B) was down 70 cents to $40.90.
The gold sector also turned negative as bullion prices lost early momentum and the April contract faded $4.90 to US$1,743.50 an ounce. Goldcorp Inc. (TSX:G) fell 53 cents to $47.05.
The financials sector provided some support with Royal Bank (TSX:RY) ahead 35 cents to $53.93 while Bank of Montreal (TSX:BMO) was up 32 cents to $58.44.
Traders also took in earnings news from a variety of sectors.
WestJet (TSX:WJA) said it is raising its dividend by 20 per cent to six cents a share. The carrier also reported that profits fell 4.3 per cent in the fourth quarter to $35.6 million. Revenue grew 12.9 per cent to $721.5 million and WestJet shares gained 46 cents to $13.56.
Fertilizer producer Agrium Inc. (TSX:AGU) said quarterly profits increased 43 per cent to US$193 million in the fourth quarter. Agrium's sales were up 32 per cent to $3.18 billion and its shares were up 80 cents to $81.90.
TMX Group Inc. (TSX:X) said its profits dropped 21 per cent to $52.7 million in the fourth quarter. Revenue dropped seven per cent to $161.7 million from $174.1 million. TMX Group chief financial officer Michael Ptasznik said the results reflect “the slowdown in listing and equity trading markets during the fourth quarter.” TMX shares rose slipped 10 cents to $41.80.
European bourses were mainly higher as London's FTSE 100 index slipped 0.09 per cent, Frankfurt's DAX gained 0.2 per cent and the Paris CAC 40 was up 0.07 per cent.
Earlier in Asia, Tokyo's Nikkei 225 index gained 1.1 per cent, Hong Kong's Hang Seng surged 1.5 per cent while mainland China's Shanghai Composite Index jumped 2.4 per cent and the smaller Shenzhen Composite Index gained 2.8 per cent.
