The Canadian Press

The Toronto stock market looked set to fall at the Thursday open amid another round of worries about a potential Greek debt default as the country’s borrowing costs continue to surge.

New York markets also looked set to open lower with the Dow Jones industrial futures down 46 points to 10,803, the Nasdaq futures off 6.5 points to 1,968.5 while the S&P 500 futures fell 5.6 points to 1,173.4.

Greek borrowing costs in the money markets grabbed investor attention on Thursday. The spread between Greek and German 10-year bond yields widened to 4.4 percentage points earlier, its highest level since the euro was introduced in 1999. The higher the spread, the less confidence markets are showing in Greece’s ability to pay.

Greek shares took another battering — the benchmark ASE composite index was down around 5%.

The new round of worry comes barely two weeks after the EU finally agreed to a backstop bailout mechanism for the debt-laden country, that would also involve the International Monetary Fund.

There are concerns that debt problems in Greece and other European nations could upend a global economic recovery and damage the euro.

The U.S. dollar rose against the euro and other major currencies, including the Canadian dollar.

The loonie was down 0.38 of a cent to 99.11 cents US.

The Toronto market will likely be hit with losses in the energy and mining sectors as commodity prices also backed off. The May crude contract on the New York Mercantile Exchange fell 85 cents to US$85.03 a barrel.

The June bullion contract on the Nymex declined $7.70 to US$1,145.30 an ounce while the May copper contract in New York was off five cents to US$3.54 a pound.

Earlier in Asia, Japan’s benchmark Nikkei 225 stock average fell 1.1% and Hong Kong’s index was little changed.

Sovereign debt worries pushed European bourses lower with London’s FTSE 100 index down 1.08%, Frankfurt’s DAX lost 1.07% and the Paris CAC 40 lost 1.6%.

Meanwhile, the European Central Bank has kept its benchmark interest rate at a record low of 1% for the 11th month running as the 16 nations that use the currency find recovery from recession fragile.

The Bank of England also announced it would keep interest rates at a record low of 0.5% for the 13th consecutive month in its last decision before a national election.

Both the Toronto and New York markets lost ground on Wednesday in the wake of disappointing data showing that consumer credit in the U.S. fell by US$11.5 billion in February.

Economists had expected borrowing to rise by US$500 million. Weakness in credit cards and auto loans gave investors pause about whether consumer spending will remain stagnant and slow a recovery.

Buyers were further discouraged by a suggestion from Thomas Hoenig, a rate-setter at the U.S. Federal Reserve, that borrowing costs should start rising soon.

The TSX lost 46 points while the Dow industrials shed 72 points.

Before the open on Thursday, investors will take in what is expected to be another positive report on the jobs market. Economists polled by Thomson Reuters predict new claims for unemployment benefits dropped by 4,000 to a seasonally adjusted 435,000 last week. It would be the fifth drop in the last six weeks.

In corporate news, the Cogeco Inc. (TSX:CGO) cable and media business reported a $10.5-million profit for its most recent quarter, rebounding from the $115.2-million loss from a year earlier. Cogeco’s revenue rose by 5.5% to $329.1 million in the three months ended Feb. 28, the second quarter of the Montreal-based company’s 2010 financial year. The profit amounted to 63 cents per share, compared with a loss of $6.88 per diluted share a year earlier.

Astral Media Inc. (TSX:ACM.A) said its second-quarter profit was $33.6 million, up 24% from $27.1 million a year earlier. The radio, specialty TV and billboard company said that revenues rose 4% overall to $218.3 million, led by a 23% surge in revenue from outdoor advertising. The net income amounted to 59 cents per share, up from 48 cents a share a year earlier.