If Friday began with big hopes for the Canadian dollar and commodities, along with modest expectations for North American stock market indexes, it didn't end that way.
A higher-than-expected reading on Canadian consumer prices in February pushed the loonie toward par with the U.S. dollar in early trading, but the move reversed course soon after on the realization that the higher inflation reading may have been due to the Olympic Games.
Meanwhile, stock market indexes suffered their worst setback in a month after India's central bank raised interest rates unexpectedly, feeding a new round of concerns about the impact of rising rates on global economic growth.
The Dow Jones industrial average closed at 10,741.98, down 37.19 points, or 0.4 per cent. The broader S&P 500 closed at 1159.90, down 5.93 points, or 0.5 per cent. While that decline wasn't exactly catastrophic, it contrasted with the steady gains over most of the past month, and represented the biggest one-day dip since Feb. 23.
In Canada, the S&P/TSX composite index closed at 11,947.98, down 92.03 points, or 0.8 per cent - also the biggest setback since February.
In both markets, commodity producers hit the hardest, with energy stocks and materials falling about 1 per cent each. Crude oil fell to $80.68 (U.S.) a barrel, down $1.52. Gold fell to $1107.60 an ounce, down $19.90. Meanwhile, the Canadian dollar slipped to 98.5 cents against the U.S. dollar, down about a fifth of a cent and representing nearly a full-cent reversal from its high earlier in the day.
Among Canadian materials stocks, Potash Corp. of Saskatchewan Inc. fell 1.4 per cent and Goldcorp Inc. fell 0.9 per cent. Among energy stocks, Suncor Energy Inc. fell 2.7 per cent and Canadian Oil Sands Trust fell 0.8 per cent.
In the U.S., financials were also soft, with Bank of America Corp. down 1.5 per cent and Citigroup Inc. down 3 per cent. As well, Palm Inc. plunged 29.2 per cent after the smart phone maker forecast disappointing revenue in the fiscal fourth quarter that fell far shy of analysts expectations. An analyst at Canaccord Adams, Peter Misek, actually cut his target price on the stock to $0.