The S&P/TSX composite index shed 21.99 points to 12,463.6 while the TSX Venture Exchange rose 2.42 points to 1,650.53. The Toronto stock market is closed Monday for Ontario's Family Day holiday while New York markets are shut for Presidents' Day.
The Canadian dollar lost early momentum as copper and gold gave up early gains and was unchanged at 100.35 cents US amid signs of slightly higher price pressure. Statistics Canada reported that higher gasoline prices led to Canada’s annual inflation rate rising two notches to 2.5 per cent in January.
As well, underlying core inflation — which excludes volatile items such as some fresh food and gas — rose to 2.1 per cent, one tenth of a percentage point higher than the Bank of Canada’s target.
U.S. markets were mainly positive with the Dow Jones industrial average up 31.26 points to 12,935.34.
The Nasdaq composite index was down 3.41 points to 2,956.44 while the S&P 500 index climbed 2.64 points to 1,360.68.
A spokesman for German Chancellor Angela Merkel said she and the leaders of Italy and Greece are "optimistic" that a second massive bailout for Greece can be agreed next week.
The 17 finance ministers of the countries that use the euro are meeting Monday to discuss the bailout.
The comment was the strongest indication yet that the meeting will bring some tangible decisions on the €130 billion rescue for Greece as well as a related €100 billion debt relief from private investors.
Toronto and New York markets had racked up strong triple digit advances Thursday amid reports that the European Central Bank will swap its holdings of an estimated €50 billion of Greek government bonds for new bonds to ensure that it doesn’t take losses in a debt restructuring. The ECB bought most of the bonds at a deep discount while attempting to hold down Greek borrowing costs and would realize a profit on the exchange.
Traders were also encouraged by better than expected economic data on jobless insurance claims and an important index on manufacturing activity in the U.S. Northeast.
Also, Germany appeared to abandon its effort to delay the release of the bulk of the bailout money until after Greek elections expected to take place in April.
And, on Friday, France’s Finance Minister Francois Fillon told RTL radio that the Europeans must honour their commitments, now that the Greek Parliament and party leaders have met key conditions.
The TSX gold sector led decliners, down about one per cent while April gold gave back $3.40 to US$1,725 an ounce. Barrick Gold Corp. (TSX:ABX) improved by 88 cents to $47.12.
Base metal stocks also weakened as March copper gave up early gains and slipped two cents to US$3.77 a pound. Teck Resources (TSX:TCK.B) was down 75 cents to $38.63.
Financials also weighed on the Toronto market as investors continued to react negatively to earnings issued Wednesday by Sun Life Financial (TSX:SLF). The insurer's stock was down 34 cents to $20.54 and Scotiabank (TSX:BNS) lost 22 cents to $53.40.
The energy sector led advancers Friday, up 0.8 per cent amid some major dealmaking as Encana Corp. (TSX:ECA) said it is selling its 40 per cent interest in British Colombia gas assets to Japan’s Mitsubishi Corp. for $2.9 billion.
The energy giant also reported its quarterly loss narrowed to $246 million, down from $469 million a year ago and its shares gained 48 cents to $20.63.
The March crude contract gained 53 cents to US$102.84 a barrel. Elsewhere in the sector, Cenovus Energy (TSX:CVE) climbed 32 cents to $38.93.
Crude has jumped from US$96 earlier this month as a surge in stock markets suggests investor confidence in the U.S. economic outlook is improving.
Rising fears that a military conflict will erupt over Iran’s nuclear program and block oil supplies from reaching markets has also helped push crude prices higher.
However, some analysts are starting to worry that rising fuel costs will undermine consumer spending and stymie economic growth.
The industrials sector was also a major prop with Canadian Pacific Railway (TSX:CP) up 74 cents to $73.62.
European bourses advanced with London's FTSE 100 gaining 0.45 per cent, Frankfurt's DAX climbed 1.36 per cent and the Paris CAC 40 was ahead 1.45 per cent.
In other corporate news, pipeline and natural gas company Enbridge Inc. (TSX:ENB) reported fourth quarter net earnings grew slightly. Enbridge’s earnings were $335 million, or 44 cents per share, compared to $326 million a year ago.
Revenues grew to $5.4 billion from $4.1 billion in the fourth-quarter of 2010 as the company shipped a greater volume across its pipelines and its shares fell $1.27 to $37.93.
Shares in Cott Corp. (TSX:BCB), one of the world’s largest soft drink producers, fell 35 cents to $6.42 as it reported it lost US$12 million or 12 cents a share for the three months ended Dec. 31. That compared with a net profit of profit of US$15 million or 16 cents in the year-earlier quarter as margins shrunk because of higher commodity costs.
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