Source: The Canadian Press

North American stock markets headed for a lower open over concerns about how deep spending cuts by European countries will slow a global economic rebound.

In New York, the Dow Jones industrial futures were down 81 points to 10,692, the Nasdaq futures fell 16.25 points to 1,931 while the S&P 500 futures declined 10.7 points to 1,146.1.

Markets had risen sharply earlier in the week after a rescue package worth nearly US$1 trillion was launched by the European Union and International Monetary Fund to try and contain mounting debt problems.

That alleviated short-term concerns about Greece defaulting on its debt. But the bailout still requires significant austerity measures in some countries.

Currency traders continued to move out of the euro because of concerns that strict cost-cutting measures in countries like Greece, Spain and Portugal will slow the continent’s economy to a crawl in the coming years.

Investors moved into the perceived safe haven of the U.S. dollar, which pushed the euro down to US$1.248 after earlier dropping to an 18-month low of $1.2433. The euro has dropped more than 6% since the beginning of the month.

The Canadian dollar was under pressure Friday morning, down 0.67 of a cent to 97.32 cents US.

Commodity prices also backed off as the June crude contract on the New York Mercantile Exchange fell $1.29 to US$73.11 a barrel.

The July copper contract on the Nymex declined seven cents to US$3.16 a pound.

But nervous investors pushed the price of gold higher, up $17.40 to US$1,246.60 an ounce.

On Wednesday, bullion hit a record intraday price of US$1,249.20 an ounce as investors use gold as a hedge against inflation and protection against deteriorating currencies like the euro.

In Asia, Japan’s benchmark Nikkei 225 stock average closed down 1.5% while Hong Kong’s Hang Seng index fell 1.4%.

London’s FTSE 100 index fell 1.76%, Frankfurt’s DAX lost 1.43% and the Paris CAC 40 was down 2.63%.

In earnings news, Quadra Mining Ltd. (TSX:QUA) reported first-quarter net earnings of US$55.6 million or 55 cents a diluted share, up from $26.7 million or 40 cents in the prior-year period. Revenue was $192.9 million, up sharply from $106.3 million in the 2009 quarter.

Montreal-based toymaker Mega Brands Inc. (TSX:MB) reported its net sales were up 13% to $49.1 million from $43.5 million in the latest quarter as the company benefited from the spring launch of Thomas & Friends toys for preschoolers. Mega Brands also saw its first quarter net income soar to US$98.2 million or $2.28 per share, from a year-earlier loss of $25.9 million or 71 cents per share.

Insurance company Kingsway Financial Services Inc. (TSX:KFS) had $24.1 million or 46 cents per share of net income in the first quarter with $83.4 million of revenue from insurance premiums and investment income. That compared with a $58.3-million loss, or $1.06 per share, in the first quarter of 2009 with $142.4 million of revenue.