TSX set for higher open at end of bruising week

The Canadian dollar was slightly higher as commodity prices also rallied from the lows of the past week, up 0.15 of a cent to 98.28 cents US. The loonie has also suffered this month, down about three US cents as tension over Greece sent traders to the safe haven status of U.S. Treasuries and away from riskier assets such as commodities and resource-based currencies such as the Canadian currency.

U.S. futures were also positive at the end of a bruising week. The Dow industrials lost 156 points alone on Thursday following a disappointing read on the U.S. manufacturing sector in the northeast. The Philadelphia Federal Reserve index unexpectedly fell into negative territory.

Meanwhile, traders looked to Facebook Inc.’s initial public offering. Facebook’s stock is set to begin trading on the Nasdaq Stock Market on Friday, the day after the world’s definitive online social network raised US$16 billion in an initial public offering that valued the company at $104 billion. Facebook priced its IPO at $38 per share on Thursday, at the top of expectations. The stock will trade under ticker symbol will be FB.

The Dow Jones industrial futures were up 44 points to 12,457, the Nasdaq futures gained 11.5 points to 2,516.25 and the S&P 500 futures were ahead six points to 1,307.3.

Commodity prices advanced after the risk-on trade pushed prices for oil and metals to multi-month lows this week.

The June crude contract was up 21 cents to US$92.77 after closing Thursday at its lowest level since November.

July copper gained two cents to US$3.50 a pound after hitting levels last seen in January. And June bullion was ahead $15 to US$1,589.90 after hitting its lowest close since last July on Wednesday.

Despite the early absence of red ink, there was still plenty of negative developments to fret over.

Ratings agency Moody’s Investor Services downgraded 16 Spanish banks Thursday.

It said it took the action because the banks face a rising tide of bad loans linked to Spain’s recession, a gloomy real estate market and high unemployment.

The downgrade comes on worries that its banks are overexposed to an imploded real estate bubble and the government, fighting recession and a nearly 25% jobless rate, could not afford to bail them out if it needed to.

Shares in Bankia S.A. – a recently nationalized bank that is heavily laden with toxic assets – shot back up 18% after losing almost that much Thursday on a media report that depositors had withdrawn €1 billion in the week since the state took over.

The nervousness about Spain’s banks comes as the eurozone financial crisis intensifies. Political turmoil in Greece has increased the likelihood that it could leave the 17-country monetary union, a move that could have ripple effects throughout Europe and the world’s financial markets. Greeks go back to the polls June 17 after an election May 6 proved inconclusive.

There are concerns that parties campaigning for an end to the austerity measures that have secured vital bailouts will be in a stronger position after the vote.

Depositors have also been pulling their funds out of Greek banks. People fear the country’s financial sector might collapse if Greece left the eurozone and that their savings would become worthless if the country started using a substantially devalued new currency, such as the dacha.

European bourses were mixed with London’s FTSE 100 off 0.79%, Frankfurt’s DAX dipped 0.03% and the Paris CAC 40 added 0.08%.

Earlier in Asia, Japan’s Nikkei 225 tumbled three per cent to its lowest finish in four months as signs of weakness in the U.S., a critical export market for Japanese companies, battered some of the country’s behemoth manufacturers.

Hong Kong’s Hang Seng dropped 1.3%, Australia’s S&P/ASX 200 slid 2.7%, South Korea’s Kospi tumbled 3.4%.

Mainland Chinese shares lost ground, with the benchmark Shanghai Composite Index losing 1.4% to 2,344.52.