The Canadian Press

The Toronto stock market closed lower as doubts about what European countries will do to help Greece with its debt crisis pushed the U.S. dollar higher and punished commodity prices.

The S&P/TSX composite index dropped 60.65 points to 12,040.01 and the TSX Venture Exchange was down 2.92 points at 1,574.86.

Greece is struggling to raise billions of dollars to finance its huge budget deficit — the biggest in Europe — and it wants support from other European countries so it can borrow at a more attractive rates. Greek Prime Minister George Papandreou said it will need help from the International Monetary Fund if it doesn’t receive a financial aid mechanism from fellow European countries within a week.

“Greece is the one that everybody is focused on right now. But it hasn’t been forgotten that there are other countries out there that are having problems as well,” said Colin Cieszynski, market analyst at CMC Markets Canada.

“And the ongoing risk is that this could spiral into something bigger. … Greece is the main one everybody is trying to deal with first, but Spain has issues and Portugal seems to be trying to clean up their mess and the U.K. has issues as well.”

The higher greenback pushed the Canadian dollar lower after two days of gains that brought it closer to parity. The loonie was down 0.33 of a cent at US98.65 cents. The loonie last hit parity during intraday trading July 17, 2008. Prior to that, it was on equal footing with its U.S. counterpart for about two weeks in May, 2008.

The TSX base metals sector was the leading Toronto decliner, down 1.49 per cent as May copper fell two cents at US$3.40 a pound. Teck Resources (TSX:TCK.B) lost 71 cents to C$41.26 and Equinox Minerals (TSX:EQN) dipped 17 cents to C$3.70.

The energy sector shed 0.86 cent as the stronger American currency pushed oil prices lower following two days of sharp advances that had been fuelled by signs U.S. crude demand might be improving.

The April crude contract on the New York Mercantile Exchange declined 73 cents to US$82.20 a barrel. Canadian Natural Resources (TSX:CNQ) was down 96 cents to C$73.73 while EnCana Corp. (TSX:ECA) ran down 58 cents to $32.12.

The financial sector was little changed after American banking giant Citigroup cuts rating on the global financial sector to neutral from overweight.

The gold sector was flat as the April bullion contract on the Nymex shed early losses to advance $3.30 to US$1,127.50 an ounce. Goldcorp Inc. (TSX:G) faded 46 cents to C$39.82.

The tech sector was the only positive sector with CGI Group (TSX:GIB.A) ahead 27 cents at $15.28.

Data showing tame inflation and falling jobless claims helped balance the latest sovereign debt worries.

U.S. consumer prices were flat last month, as a rise in food prices was offset by a drop in gasoline and other energy costs. Excluding volatile food and energy prices, the core Consumer Price Index rose by 0.1 per cent in February, which matched analysts’ estimates.

The report adds to evidence that the weak economy has all but erased inflation. That allows the U.S. Federal Reserve to continue its efforts to revive the economy by keeping the short-term interest rate it controls at a record low near zero.

Workers filing for unemployment benefits for the first time fell to 457,000 in the United States last week, slightly higher than the 455,000 figure that had been expected.

The Dow Jones industrials rose 45.5 points to 10,779.17. The Nasdaq composite index was 2.19 points higher at 2,391.28 while the S&P 500 was off 0.38 of a point at 1,165.83.

In corporate news, FedEx Corp. said its fiscal third-quarter profit more than doubled. It also raised its full-year earnings forecast, bringing it in line with analysts’ expectations. FedEx is considered a bellwether for the economy because of the variety of products it ships. Shares rebounded from a weak start and were up $2.87 at US$92.67.

A U.S. federal judge has dismissed a shareholder lawsuit against CIBC (TSX:CM) that claimed the big Canadian bank misled investors about its exposure to the U.S. subprime mortgage market. CIBC shares dipped 30 cents to C$75.06.

Coffee store chain operator Second Cup Income Fund (TSX:SCU.UN) posted net income of $4.1 million, an improvement over a year-earlier loss of $17.1 million. The fund also announced plans to convert from an income trust to a corporation by the beginning of the next calendar year. Its units rose 51 cents to $7.33.