The Canadian Press

The Toronto stock market headed for a negative open as commodity prices weakened amid mounting concerns about Greece’s ongoing debt problems and the European economy in general.

U.S. futures also indicated a lower open with the Dow Jones industrials down 26 points to 10,887, the Nasdaq futures declined 4.25 points to 1,974.5 while the S&P 500 futures were down 4.1 points to 1,181.7.

The May crude contract on the New York Mercantile Exchange dropped 59 cents to US$86.25 a barrel.

The decline was helped along by a report which showed U.S. gasoline supplies fell more than expected last week while crude and distillate inventories rose.

The June gold contract on the Nymex was ahead $1.10 to US$1,137.10 an ounce while May copper in New York shed a penny to US$3.60 a pound.

The Canadian dollar was skirting around the parity level with the U.S. dollar for a second day. The currency was up 0.07 of a cent to 99.95 cents US after going as high as 100.03 cents US earlier Wednesday. It moved above parity with the greenback Tuesday for the first time since July 2008.

Investors took in news before the open that Europe’s economy unexpectedly stagnated in the fourth quarter.

The European Union’s statistics office said that gross domestic product in the 16-nation euro region remained unchanged compared with the third quarter, when it rose 0.4%. It had previously reported that fourth quarter growth came in at 0.1%. The agency also reported that corporate investment dropped 1.3% as opposed to the 0.8% estimated earlier.

“Today’s data clearly highlight the fragile and unsustainable nature of the eurozone recovery,” said Owen James, an economist at the Centre for Economic and Business Research in London.

Investors continued to fret about Greece’s ability to pay off its debts — the spread between Greek and Germany 10-year bond yields stood at 3.84 percentage points. That was just below Tuesday’s all-time high but way up on the 3% level when the EU agreed on an aid program that would involve the International Monetary Fund.

Talk that Greece was looking to renegotiate the terms of the backstop agreement — denied by the finance ministry — as a technical team from the IMF arrived in Athens has fuelled the spike in Greek borrowing costs.

“All of this puts a question mark over longer term debt sustainability as well as the threat of contagion elsewhere in the eurozone,” said Neil Mackinnon, global macro strategist at VTB Capital in London.

Earlier in Asia, Hong Kong’s Hang Seng stock index jumped 1.8% while Japan’s Nikkei 225 stock average rose 0.1%.

London’s FTSE 100 index dipped 0.15%, Frankfurt’s DAX was off 0.21% and the Paris CAC 40 was down 0.47%.

In corporate news, Canadian Tire Corp. (TSX:CTC.A) says its main focus over the next three to five years will be growing its core retail operations. Under a strategic plan announced Wednesday, the company acknowledges that returns from its financial services business have been below expectations. Chief executive Stephen Wetmore said Canadian Tire has an advantage over competitors because of its well-known brand and unique assortment of goods.

Elsewhere in the retail sector, sporting goods company Forzani Group Ltd. said Tuesday after markets closed that it is seeing early signs that recession-battered consumers may be ready to spend again, but cautioned that its fortunes will largely be at the mercy of Mother Nature for the rest of this year.

Crowflight Minerals Inc. (TSX:CML), a Toronto junior that put itself up for sale, has received a $150 million takeover bid from China’s Jinchuan Group Ltd. and a partner linked to the Canadian miner’s chairman. The bid appears to top a rival $102 million offer from Pala Investments Holdings Ltd. of Switzerland to buy Crowflight’s Bucko Lake nickel mine and surrounding exploration properties in Manitoba. Pala is a minority owner of Crowflight, with 26% of its shares.