Source: The Canadian Press

The Toronto stock market appeared heading for a lower open Wednesday as commodity prices backed off amid renewing worries about Europe’s debt crisis.

The Canadian dollar was up 0.02 of a cent to 99.37 cents US.

U.S. markets pointed to a negative open in New York as the Dow Jones futures declined 19 points to 11,402, the Nasdaq futures dropped seven points to 2,207 while the S&P 500 futures were down 2.2 points to 1,235.

Government debt worries were back in focus after Spain was warned it may have its credit rating downgraded.

Moody’s Investor Services put Spain’s Aa1 rating on review for possible downgrade because of its high refinancing needs in 2011, a potential rise in the debt burden and increased concerns over the ability of the government to get its public finances into shape.

Rival agency Standard & Poor’s delivered a similar warning to Belgium on Tuesday, which made investors nervous that the debt crisis will spread, following bailouts of Greece and Ireland so far this year.

“Jumpy investors will not be pleased at the return of eurozone fiscal difficulties to headlines,” said Ben Critchley, sales trader at IG Index.

Oil prices fell below $88 a barrel after U.S. crude supplies fell less than expected and gasoline inventories jumped, suggesting demand remains sluggish.

The January crude contract on the New York Mercantile Exchange lost 68 cents to US$87.60 a barrel.

Metal prices also lost ground with the March copper contract on the Nymex down six cents to US$4.15 a pound while the February gold contract in New York declined $9.60 to US$1,394.50 an ounce.

In overseas trading, Tokyo’s Nikkei 225 stock average fell 0.1%, Hong Kong’s Hang Seng index lost 2% and the Shanghai Composite index fell 0.5%.

London’s FTSE 100 index was down 0.33%, Frankfurt’s DAX was down 0.58% while the Paris CAC 40 declined 0.76%.

In corporate news, fertilizer company Agrium Inc. (TSX:AGU) said it’s reached an agreement to sell the commodity management business of AWB Ltd., the Australian agricultural firm it recently acquired for $1.2 billion. The exact purchase price wasn’t disclosed. Agrium said “the purchase price to be paid by Cargill will be the net asset value of the acquired businesses as at the completion date of the transaction plus a premium.”

MTS Allstream, a business unit of Manitoba Telecom Services Inc. (TSX:MBT), said in its financial outlook that it expects to cut costs by $25 million to $35 million in 2011, with restructuring costs to be $10 million.

Dundee Real Estate Investment Trust (TSX:D.UN) has agreed to acquire Realex Properties Corp. (TSX:RP) for $154.4 million in cash.