Resource stocks weighed on the Toronto stock market Friday as commodity prices retreated amid a weaker than expected reading on Chinese economic growth.
The S&P/TSX Composite Index began Friday down 135.86 points, or 1.1%, to 12,078.66
The Canadian dollar fell back 0.18 cents, to 100.38 cents U.S.
In corporate news, Air Canada is warning that airport disruptions could disrupt flights across the country all day and into the weekend. The alert comes as various media reports say a small group of pilots may stage a "sick-in" to express their displeasure with airline management.
Thomas Cook Canada Inc. is making an early exit from its five-year agreement with Jazz Aviation due to market conditions. The Halifax-based company says it will cease flying planes for Thomas Cook at the end of April, three years early.
The TSX Venture Exchange slid 13.51 points to 1,458.99, while the Nasdaq Canada index ducked back 3.67 points to 405.34
All 14 Toronto subgroups were lower. Metals and mining stumbled 2.9%, global base metals were off 2.1%, and materials lost 1.7%.
In New York, stocks opened modestly lower Friday, following a two-day rally, as a slowdown in China overshadowed a batch of better-than-expected earnings results.
The Dow Jones Industrials tripped 105.92 points to begin the day at 12,880.70
The S&P 500 weakened 9.04 points to 1,378.53, and the Nasdaq subtracted 33.14 points to 3,022.41
The Chinese economy grew at an annual pace of 8.1% in the first quarter, the country's National Bureau of Statistics said Friday, marking a deceleration from an 8.9% growth rate in the prior quarter.
Fears are looming among many investors about a slowdown in China following years of breakneck growth and what some believe is an inflating property bubble. Others, however, are more optimistic; the World Bank predicts the Chinese economy will slow to a 8.2% growth rate this year but rebound to 8.6% in 2013.
China's slower growth weight broadly on the market, with 80% of the Dow's 30 components trading lower, including JPMorgan Chase despite first-quarter earnings and revenue beat.
The bank posted earnings of $1.31 U.S. a share, which were lower from a year ago, but above analyst estimates of $1.17 U.S. Shares dipped more than 1%.
Wells Fargo also beat expectations, reporting earnings of 75 cents U.S. a share on $21.6 billion U.S. in revenue, but the bank's stock also fell.
Shares of Bank of America, Goldman Sachs and Morgan Stanley which all post results next week, were also lower.
Leading up to Friday's open, U.S. stocks have posted gains for two straight days, including a 1.4% rally for the Dow and S&P 500 on Thursday.
Google beat earnings expectations late Thursday, with a profit of $2.9 billion U.S. for the first quarter, up 61% from a year earlier. Google's revenue climbed 24% to $10.7 billion U.S.
The company also announced an unorthodox stock split. But shares slipped in early trading.
Coinstar shares jumped after the company noted "stronger than anticipated consumer demand at Redbox" on Thursday and raised its earnings outlook for the year.
Dow Chemical shares edged higher after the company announced late Thursday that it will raise its second-quarter dividend by 28% to 32 cents U.S. per share.
Economically speaking, the U.S government reported Friday morning that the Consumer Price Index, its key inflation metric, rose 0.3% in March, led by increases in gas prices, with a year-over-year increase of 2.7%. The reading was in line with analyst expectations.
Later in the day, Federal Reserve Chairman Ben Bernanke will speak about "Reflections on the Crisis and the Policy Response," in New York. Investors will be watching closely for hints about further stimulus from the central bank.
Federal Reserve officials have made about 20 public appearances this week, expressing conflicting views about keeping interest rates low until 2014.
The price on the benchmark 10-year U.S. Treasury gained, lowering yields to 2.00% from Thursday's 2.05%. Treasury prices and yields move in opposite directions.
Oil for May delivery dwindled 33 cents to $103.30 U.S. a barrel.
Gold futures for April delivery fell $9.30 to $1,670.20 U.S. an ounce.