Source: The Canadian Press

Resource stocks could weigh on the Toronto stock market in early trading Friday as oil and copper prices fell back amid weak U.S. economic data which sparked renewed concerns about slowing demand.

The Canadian dollar declined 0.15 of a cent to 97.22 cents US.

U.S. futures also pointed to a weak open as the Dow Jones industrial futures slipped six points to 10,370, the Nasdaq futures added 0.5 of a point to 1,910 while the S&P 500 futures were down 0.7 of a point to 1,111.

Oil prices were lower for a second day after data showed rising U.S. crude inventories with the July contract on the New York Mercantile Exchange down $1.01 to US$75.78 a barrel.

“Oil pricing at US$77 was overbought. It’s not surprising that prices have eased a bit given the bearish economic data,” said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore.

The July copper contract on the Nymex was down four cents to US$2.86 a pound.

Investors fleeing risk pushed gold prices higher with the August bullion contract in New York up $10.70 to US$1,259.40.

Commodity prices also headed lower amid a report from the World Bank saying that China’s economy is showing signs of softening after its strong stimulus-fuelled rebound last year.

It said that industrial production and other key indicators show the pace of growth moderating, albeit remaining relatively strong, and forecast growth at 9.5% this year, slowing from an annualized rate of 11.9% in the first quarter.

Stocks were little changed Thursday after the U.S. Conference Board’s gauge of future economic activity rose a less than expected 0.4% in May, which signalled slow growth in the U.S. economy in the summer and fall.

Also, the Philadelphia Federal Reserve reported that its manufacturing index fell instead of strengthening during June while weekly jobless insurance claims rose unexpectedly last week after falling three straight weeks.

Still, the TSX and New York markets seem headed for a positive end to the week as worries about the European fiscal crisis eased after Spain, one of the most pressured by markets, successfully sold bonds, and government leaders said they would reveal results of bank stress tests.

Although Spain was charged higher costs to borrow money, demand for the debt was healthy, boosting sentiment among investors worried the country could need a financial backstop.

Also, the EU’s 27 leaders also agreed Thursday to publish the results of tests that check the stability of banks.

In overseas trading, London’s FTSE 100 index rose 0.25% after official figures showed Britain’s public borrowing was below expectations in May. Though the 16 billion pounds borrowed remained high by historical standards, it will be welcomed by markets ahead of the government’s publication on Tuesday of an “emergency budget” to fight the deficit.

Frankfurt’s DAX inched up 0.05% while the Paris CAC 40 was 0.19% lower.

Earlier in Asia, Japan’s benchmark Nikkei 225 stock index edged down less than 0.1% and China’s Shanghai Composite Index shed 1.8% ahead of Agricultural Bank of China’s record-breaking initial public offering.

Elsewhere, Hong Kong’s Hang Seng added 0.7%.