Source: The Canadian Press

North American stock markets are likely in for a lower open Wednesday after moves by Germany to support the euro by cracking down on speculators unnerved investors and sent the currency to a fresh, four-year low.

In New York, the Dow Jones industrial futures slid 77 points to 10,413 after Germany’s regulator announced it was banning so-called naked short-selling of eurozone government bonds, as well as shares in 10 key German financial institutions until March 31st.

The Nasdaq futures fell 12.25 points to 1,875.75 while the S&P 500 futures were down 9.8 points to 1,108.9

In a typical short sale, a trader sells borrowed shares in hopes of buying them cheaper later and profiting on the difference. A “naked” short is when traders sell shares without borrowing them first.

The unexpected decision sent shock waves through the markets, especially because it was done unilaterally by the eurozone’s largest economy.

The euro responded badly to the German move, dropping to $1.2146 earlier before recovering somewhat to trade at $1.2214.

“Unless the world sings from the same hymn sheet — the rest of the EU, Britain and the U.S. all on board — it is a useless exercise that just creates seismic ripples of unrest,” said David Buik, markets analyst at BGC Partners in London.

Meanwhile, the U.S. dollar continued to benefit from investor nervousness as other currencies and commodities gave up ground.

And the Canadian dollar was down 1.05 cents to US$95.38 cents.

The June crude contract on the New York Mercantile Exchange fell $1.21 to US$68.20 a barrel. Oil has plunged more than 20% since climbing to US$87.15 a barrel on May 3 on demand concerns and the rising greenback.

The June bullion contract on the Nymex was down $6.60 to US$1,208 an ounce. Gold had run up to an intraday record high of just under US$1,250 on Friday.

The July copper contract in New York shed eight cents to US$2.95.

The euro has been under pressure as worries about a European government debt crisis have grown. There has been little confidence that a US$1 trillion dollar package is enough to help countries with unsustainably high debt.

And there are worries that sharp cuts in government spending needed to get debt under control will dramatically slow growth in Europe and possibly derail a global economic recovery.

The move from Germany to support the euro also brought back memories a widely considered unsuccessful attempt by the U.S. and British authorities to prop up stock markets at the end of 2008 in the wake of the collapse of Lehman Brothers and the ensuing crisis that gripped the banking sector.

In Asia, shares also dropped in the wake of the German decision.

Japan’s benchmark Nikkei 225 stock average dropped 0.5%.

Benchmarks in Singapore, India and Indonesia all fell more than 1% and Hong Kong’s Hang Seng index lost 1.8%.

London’s FTSE 100 index fell 2.18%, Frankfurt’s DAX was down 2.26% and the Paris CAC 40 index lost 2.41%.

In earnings news, Canaccord Financial Inc. (TSX:CF) reported a profit of $7.5 million for its fourth quarter and an annual profit of $38.5 million. It was a big improvement on comparable periods a year earlier, when Canaccord’s fourth-quarter net income was just $3.6 million and fiscal 2009 recorded a $47.6-million annual loss.

Deere and Co. reported its second-quarter profit jumped 16% to US$547.5 million as sales of farm and construction equipment improved, up from net income of $472.3 million a year earlier. Deere’s revenue grew 6% to US$7.1 billion. The company is raising its outlook for the second time this year.