Source: The Canadian Press

The Toronto stock market remained mired in the red Friday after recovering from a near 100-point plunge earlier in the session amid renewed concern over European debt woes and heightening tensions between the Koreas.

The S&P/TSX composite index was down 53.1 points at 12,892.71 – 63.62 points, or 0.5% shy of last Friday’s close.

The TSX Venture moved into positive territory, up 7.99 points at 2,057.

The Canadian dollar was off one penny at 98.04 cents US as the greenback made gains against most other currencies.

Investors flocked to the perceived safety of the U.S. dollar amid fears that Portugal and Spain could soon be forced to ask for financial bailouts and reports that more shots have been fired on the Korean peninsula.

Concerns about further European bailouts, which would cause capital to flow out of other currencies and commodities, are being amplified by low trading volumes as many U.S. traders took an extended Thanksgiving holiday, said Aaron Fennell, a senior market strategist at Lind-Waldock Canada. “Traders and investors in foreign markets are still trading, and if they’re trying to move their capital into the U.S. reserve currency, then that’s going to have a larger impact, because the Americans aren’t there to create the liquidity that would normally be there,” he said.

The January oil contract fell 10 cents to US$83.76 a barrel as traders mulled whether economic growth in China will slow, dragging down demand for crude.

Meanwhile, the December copper contract on the New York Mercantile Exchange slipped five cents to US$3.75 a pound.

And unlike earlier this week, when investors kept money in gold, the December bullion contract was down $10.60 at US$1,362.40 an ounce – likely because the enthusiasm around gold has subsided and traders are taking profits, Fennell said.

“That’s really the only difference between today and earlier in the week, when we had a similar type of rebound in the U.S. dollar,” he added.

Wall Street markets closed in the early afternoon Friday for the U.S. holiday weekend after having reacted furiously to global uncertainty when trading resumed after U.S. markets were closed for Thanksgiving on Thursday. The Dow Jones industrial average fell 95 points, or 0.9%, to 11,092. The S&P 500 index was down eight points, or 0.7%, at 1,190. The Nasdaq composite index fell nine points, or 0.3%, to 2,535.

Friday’s losses come after a market rally earlier in the week following the release of positive economic data that showed increased personal income and spending and falling jobless claims. With no economic data due Friday, investors south of the border could glean an indication about the state of the economy and consumer confidence from anecdotal evidence about stronger retail sales on Black Friday, the busiest shopping day of the year.

The TSX had rebounded over the previous two days after investor panic at the beginning of the week drove many to hit the sell button. But on a quiet Friday, a lower dollar and slightly depressed commodity prices sent it back into the red.

A majority of the main indexes on the TSX closed in negative territory. Resource sectors fell the most with energy, gold and mining stocks leading the decline.

The consumer discretionary sector, up 0.1%, was one of the few advancers as U.S. retailers reported long lineups and strong sales Friday. Shares in Indigo Books and Music (TSX:IDG) gained four cents to $15.

The energy sector was the biggest drag on the TSX, down 0.8% with shares in Suncor Energy Inc. (TSX:SU) down 39 cents at $34.16. Stock in base metals miner Teck Resources (TSX:TCK.B) was down 56 cents at $49.24.

Barrick Gold Corp. (TSX:ABX) lost 14 cents to $51.85.

Taseko Mines Ltd. (TSX:TKO) shares fell eight cents to $4.59. Questions have been raised over unusually heavy trading in the weeks before the federal environment minister denied approval for a key project, the Prosperity gold mine.

The Taseko Mines stock-trading controversy was referred Friday to the RCMP, which now has the task of deciding whether there’s sufficient evidence to warrant a criminal investigation into allegations of insider trading and government leaks.

The financial sector was down 0.3%, with TD Bank (TSX:TD) leading the decline, down 50 cents at $74.81. Investors are positioning themselves ahead of earnings season for Canada’s big five banks beginning next week.

National Bank of Canada (TSX:NA) added 56 cents at $68.58. Analysts say the Montreal-based bank has the best odds of raising its dividend when it announces its fourth-quarter earnings.

In other Canadian corporate news, Quebecor Inc. (TSX:QBR.B) received the green light from the CRTC to launch Sun TV’s new 24-hour television news service.

The CRTC said it was granting the network a Category 2 specialty service licence for five years. That means the new station will need to negotiate with cable and satellite carriers for a place in their lineup. Shares in the media company added 10 cents to $36.72.

Heroux-Devtek (TSX:HRX) has been awarded a long-term contract to provide landing gear for French aircraft manufacturer Dassault Aviation’s new business jet program.

The Montreal-area maker of aerospace and industrial products said Friday it has been contracted to design, develop, fabricate, assemble and help win certification for the new landing gear system. Its stock gained seven cents to $6.05.

Markets remained jittery following several days of tension between North and South Korea that began Tuesday when North Korea unleashed a brief hail of artillery shells against the small South Korean island of Yeonpyeong. Four South Koreans were killed.

On Friday, fresh artillery fire was heard hours after Pyongyang warned that the Korean peninsula was on the brink of war.

In Europe, the latest bout of jitters was stoked by a report suggesting that Portugal’s partners in the European Union were urging it to seek aid to prevent a sustained attack from bond market speculators.

A debt crisis that seemed containable just weeks ago is escalating, with some experts saying it is only a matter of time before Spain – like Ireland and Greece – will be forced to seek for outside help.