Canadian stocks were lingering in the red Friday morning amid faltering commodities, with traders turning cautious after yield on Spanish 10-year bonds rose above 6 percent ahead of the announcement of the results of the stress tests conducted on the country's banks.
The S&P/TSX Composite Index shed 51.73 points or 0.42 percent to 12,287.12, a day after snapping its five-day losing streak.
Among financial stocks, Scotiabank (BNS.TO) shed nearly 2 percent, while TD Bank (TD.TO) and CIBC (CM.TO) were losing close to 1 percent each.
The price of crude oil was ticking higher Friday morning with crude for November delivery edging up $0.13 to $91.98 a barrel.
In the oil patch, Baytex Energy Corp. (BTE.TO), Pacific Rubiales Energy (PRE.TO), Crescent Point Energy (CPG.TO) and Enbridge Inc. (ENB.TO) were down around 1 percent each.
The price of gold was steady near its seven-month high Friday morning as risk appetite increased after the Spanish government revealed a tight 2013 budget focused on spending cuts rather than tax hikes. Gold for December edged down $3.60 to $1,776.90 an ounce.
Among gold plays, Centerra Gold (CG.TO) rose over 4 percent, while Kirkland Lake Gold (KGI.TO) was adding over 3 percent.
Electric power transmission company TransAlta Corp. (TA.TO) gained 2 percent after announcing that through its subsidiaries, it has successfully completed the acquisition of the Solomon power station for $318 million and the acquisition is expected to generate pre-financing cash flows of approximately $40 million per year.
Smart phone maker Research In Motion Ltd. (RIM.TO) surged 13 percent after reporting a second-quarter loss that came in better than what the Street expected. RIM second-quarter net loss was $235 million or $0.45 per share, compared to net income of $329 million or $0.63 per share last year. On an adjusted basis, loss was $142 million or $0.27 per share. Analysts expected a loss of $0.46 per share for the quarter.
In economic news, Statistics Canada said real gross domestic product grew 0.2 percent in July, after edging up 0.1 percent in June, on the strength of manufacturing and utilities. Economists expected the growth to come in only at 0.1 percent. Manufacturing grew 0.6 percent in July rebounding from a 0.7 percent decline in June, while durable goods production expanded 0.7 percent in July, mainly as a result of increases in computer and electronics products
From south of the border, the U.S. Commerce Department revealed that personal income inched up by 0.1 percent in August, matching the downwardly revised increase reported for July. Economists had expected income to edge up by 0.2 percent compared to the 0.3 percent growth originally reported for the previous month. At the same time, the Commerce Department said personal spending increased by 0.5 percent in August compared to a 0.4 percent increase in July. The spending growth matched economist estimates.
Elsewhere, euro zone inflation rose unexpectedly in September due to an increase in energy and food prices, flash estimate from Eurostat showed. Inflation increased to 2.7 percent in September from 2.6 percent in August. The rate was forecast to slow to 2.4 percent.
Meanwhile, retail sales in Germany recovered in August following a modest decline in the previous month, reviving expectations that private consumption, one of the main drivers of growth for euro zone's largest economy, could steer the economy through the turbulence in the rest of the single-currency bloc.
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