Stocks to open lower as Greek bailout put on hold

U.S. futures also signalled a negative start to the session with the Dow Jones industrial futures down 88 points to 12,574, the Nasdaq futures fell 21 points to 2,540 and the S&P 500 futures declined 11 points to 1,337.3.

Eurozone finance ministers are insisting that Greece has to save an extra €325 million in order to get a crucial €130 billion second bailout in time to avoid a bankruptcy next month that could send shockwaves around the financial markets.

A deal appeared to be secured on Thursday after Greek Prime Minister Lucas Papademos and heads of the three parties backing his government agreed to deep private sector wage cuts, civil service layoffs, and significant reductions in health, social security and military spending.

The finance ministers also insist that Greece pass the cuts through a restive parliament and guarantee in writing that they will be implemented even after planned elections in April.

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.

Exports fell 0.5% from a year earlier to US$149.9 billion, while imports were down 15% at $122.7 billion.

The import decline was sharper than expected, suggesting that even the world’s second-largest economy is slowing markedly.

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 with the March crude contract on the New York Mercantile Exchange down $1.48 to US$98.36 a barrel.

The March copper contract in New York dropped seven cents to US$3.91 a pound. Copper prices have charged ahead from around US$3.43 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.

A stronger American dollar also contributed to April gold dropping $28.20 to US$1,713 an ounce.

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

There was some major acquisition activity in the resource sector.

Pulp producer Fibrek Inc. (TSX:FBK) 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 (TSX:ABH), the former AbitibiBowater.

Traders also eyed earnings from the telecom and resource sectors.

Uranium giant Cameco Corp. (TSX:CCO) 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.

Telus (TSX:T) 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.

European bourses were down sharply with London’s FTSE 100 index down 0.75%, Frankfurt’s DAX fell 1.56% and the Paris CAC 40 lost 1.32%.

Earlier in Asia, Japan’s Nikkei 225 index fell 0.6%, Hong Kong’s Hang Seng lost 1.1% and South Korea’s Kospi dropped one per cent.

However, mainland Chinese shares edged higher with the benchmark Shanghai Composite Index gaining 0.1% while the Shenzhen Composite Index gained 0.5%.