The S&P/TSX composite index fell 31.09 points to 12,462.17. The tepid showing followed a jump of nearly 200 points the previous session in the wake of reassurances from U.S. Federal Reserve chairman Ben Bernanke that the central bank was in no hurry to curtail key economic stimulus measures.
The Canadian dollar was off 0.1 of a cent at 96.19 cents US after gaining 1.2 cents Thursday.
U.S. indexes were off the best levels of the session after the Dow industrials and S&P 500 hit fresh record highs Thursday after Bernanke said the U.S. needs a "highly accommodative monetary policy," or low interest rates, for the foreseeable future. The Fed is buying $85 billion a month in bonds to keep interest rates low
The Dow Jones industrials inched up 3.38 points to a fresh, record high close of 15,464.3. But the blue chip index was pressured in large part by a slide in Boeing Inc. shares after news of a fire on board an empty Boeing 787 Dreamliner plane forced Heathrow Airport to temporarily close both its runways Friday. Also, Thomson Airways says one of its Boeing 787 Dreamliner planes travelling from England to the U.S. had to turn back after experiencing a technical issue.
Boeing’s new Dreamliners were cleared to fly again in April after a four-month grounding amid concerns about overheating lithium-ion batteries.
Boeing shares fell as much as seven per cent as the news first came in but later were down $4.97 or 4.65 per cent to US$101.91.
The Nasdaq gained 21.78 points to 3,600.08 and the S&P 500 also moved further into record territory, up 5.17 points to 1,680.19.
"(Bernanke) is very consciously trying to avoid a repetition of the mistakes made in 1994 (when) his predecessor Alan Greenspan took the markets by surprise, increased rates and the bond and stock markets had a very difficult year," said Robert Gorman, chief portfolio strategist at TD Waterhouse.
"And I think Bernanke knows the U.S. economy could ill afford (that sort of a surprise) at this stage."
Traders also took in earnings from American banking giants JPMorgan Chase and Wells Fargo that beat expectations.
JPMorgan Chase, the biggest U.S. bank by assets, made US$6.1 billion in the second quarter after stripping out payments to preferred shareholders. That was up 32 per cent from the same period a year ago and amounts to $1.60 per share, beating estimates by 16 cents. Revenue in the period grew by 14 per cent to $25.2 billion, higher than the $24.9 billion forecast by analysts.
Despite the surge in profits, JPMorgan CEO Jamie Dimon said in a statement that loan growth remained soft. The bank's shares edged 17 cents lower to $54.97 but still near their highest level in more than a decade. The stock has gained 25 per cent this year.
And Wells Fargo posted earnings of US$5.5 billion or 98 cents a share, beating estimates by five cents. Revenue was $21.4 billion versus $21.18 billion a year ago. Wells Fargo is the biggest U.S. mortgage lender, but with mortgage rates rising sharply in recent weeks analysts are concerned about the potential impact on the bank’s mortgage business.
Its shares were ahead 74 cents to $42.63.
Elsewhere in the financial sector, Scotiabank (TSX:BNS) said Friday it has withdrawn its application to acquire a 19.99 per cent stake in China’s Bank of Guangzhou. The bank said in a statement that "since announcing the proposed investment in September of 2011, Scotiabank and the City of Guangzhou have re-evaluated the proposed partnership in light of changing conditions." Scotiabank shares added 11 cents to C$57.05.
The gold sector led decliners with a slide of about 2.5 per cent as August bullion backed off $2.30 to US$1,277.60 an ounce. Barrick Gold Corp. (TSX:ABX) faded 36 cents to C$15.49 and Goldcorp Inc. (TSX:G) gave back 48 cents to $26.72.
The base metals sector was down 1.94 per cent with copper prices depressed after China’s finance minister suggested that growth could come in at seven per cent for this year, which is below the government’s official forecast.
China releases April-June growth figures on Monday morning and that could well determine trading next week.
The September copper contract on the New York Mercantile Exchange lost two cents to US$3.15 a pound and Teck Resources (TSX:TCK.B) declined 46 cents to C$22.85 while HudBay Minerals (TSX:HBM) slipped 16 cents to $6.83.
The energy sector drifted 0.45 per cent lower as signs of higher demand in the U.S. pushed the August crude contract on the Nymex up $1.04 to US$105.95 a barrel, up 2.6 per cent for the week.
In other corporate news, paper company Domtar Corp. (TSX:UFS) says it expects to post an operating loss of between US$30 million and US$35 million when it reports its second-quarter results later this month. Its shares fell $1.66 to $74.59.