Market up slightly amid recession fears

ALEXANDRA POSADZKI AND BRIAN MCKENNA

The Toronto stock market closed higher in light trading Friday ahead of a weekend debt referendum in Greece, while the loonie slid lower amid fears about a recession in Canada.

The S&P/TSX composite index closed up 44.40 points at 14,682.39 after rising almost 148 points the previous two trading days.

But Canada’s main market was still down sharply on the week — and virtually flat for the year to date — courtesy of an almost 318-point drop Monday on fears of possible knock-on effects from Greece’s debt woes.

New York markets were closed Friday for U.S. Independence Day, but not before also putting in a losing week blamed largely on the uncertainty over Greece that produced its biggest single loss of the year on Monday.

“Uncertainty is the market’s nemesis,” said Philip Petursson, managing director at Manulife Asset Management.

The Dow Jones industrial average finished the week down 216.57 points or 1.2 per cent and is in slightly negative territory for the year.

The S&P 500 index and the Nasdaq were also down more than one per cent on the week.

Petursson said he expects that North American markets will rebound from the losses, regardless of whether or not a deal is reached between Greece and its creditors.

“North American markets fell over the past couple of weeks in sympathy with what’s going on in Europe. But really, one shouldn’t have anything to do with the other,” he said.

Meanwhile, the loonie continued to drift lower, down 0.09 of a U.S. cent at 79.62 cents amid growing concerns that Canada may be in a recession, largely as a result of the plunge in oil prices over the past year.

“I think that the Canadian economy is going to continue to face challenges over the next couple of months if not couple of quarters, and that is in part going to be reflected in the TSX,” Petursson said.

On the commodity markets, oil prices continued their recent downward spiral. Around 4 p.m. Friday, the August crude contract was down $1.41 to $55.52 US a barrel, a level last seen in mid-April. The August gold contract was up $4.30 at $1,167.80 US an ounce.