The S&P/TSX composite index fell 50.14 points to 12,415.98, while the TSX Venture Exchange added 3.28 points to 1,315.62.
The Canadian dollar dropped to its lowest level since late August, down 0.85 of a cent to 100.68 cents US amid falling prices for oil and metals, particularly copper.
A major TSX decliner was radio, TV and billboard company Astral Media (TSX:ACM.A). Its shares tumbled almost 16 per cent after the federal broadcast regulator unexpectedly blocked a planned sale to telecom BCE Inc. (TSX:BCE) in a deal worth about $3.4 billion.
BCE says it will ask the federal Cabinet to intervene but a spokesman for the Canadian Radio-television and Telecommunications Commission says any appeal of Thursday's CRTC's decision would have to go to the Federal Court of Appeal. BCE shares declined 77 cents to $42.86 while Astral fell $7.49 to $39.51 as traders weighed the chances of a successful appeal.
U.S. markets suffered their worst one-day drop since June amid earnings disappointments from market heavyweights Microsoft, General Electric and McDonald’s.
The Dow Jones industrial average plunged 205.43 points at 13,343.51. The Nasdaq composite index lost 67.25 points to 3,005.62 and the S&P 500 index dropped 24.15 points to 1,433.19.
General Electric shares lost 78 cents to US$22.03 as the conglomerate disappointed even as income rose 49 per cent in the third quarter to $3.49 billion. Ex-items, GE posted earnings per share of 36 cents, which was in line with expectations. But revenue of $36.35 billion fell short of analyst forecasts.
Microsoft Corp. also discouraged buyers after the software giant’s net income fell 22 per cent in the latest quarter amid sliding PC sales and ongoing economic problems in Europe.
Net income was $4.47 billion, or 53 cents per share, three cents short of estimates. Revenue fell eight per cent to $16 billion, missing the average analyst estimate of $16.5 billion and its shares gave back 85 cents to $28.64.
Fast food chain McDonald's turned in earnings per share of $1.43 against the $1.47 that analysts had expected, sending its shares down $4.14 to $88.72.
Taken together, the results from the three companies were unsettling because they reflect consumer behaviour, whether they're buying hamburgers, a PC or an appliance.
"And they have this global footprint," said John Johnston, chief strategist at Davis-Rea Ltd.
"That’s one number that gives us an insight into the global economy where it takes a lot of economic releases cobbled together to try to get the same kind of picture."
The tech sector was down 1.36 per cent in the wake of the Microsoft report with CGI Group (TSX:GIB.A) down 55 cents to C$25.61 while Research In Motion Ltd. (TSX:RIM) gave back seven cents to $7.69.
Commodity prices were lower and the mining sector was off 1.38 per cent as December copper tumbled 11 cents to US$3.64 a pound. Teck Resources (TSX:TCK.B) declined 60 cents to C$31.45 while Taseko Mines (TSX:TKO) eased 12 cents to $2.79.
The November crude contract on the New York Mercantile Exchange was off $2.05 to US$90.05 a barrel and the TSX energy sector slipped 0.53 per cent. Cenovus Energy (TSX:CVE) lost 40 cents to C$34.13 and Imperial Oil (TSX:IMO) shed 37 cents to $45.23.
The gold sector was up about 1.2 per cent even as December bullion backed off $20.70 to US$1,724 an ounce. Goldcorp Inc. (TSX:G) gained 85 cents to C$43.05.
The TSX gained 1.75 per cent this past week after falling a like amount the previous week. The Dow eked out a 14-point gain as U.S. indexes were pressured by earnings news.
Traders also took in data showing that Canadian inflation came in at an annualized rate of 1.2 per cent in September, which was in line with expectations.
Investors were also unimpressed with an agreement early Friday by the leaders of the 17 eurozone countries to push ahead with a single banking supervisory body. The leaders remained vague on key details, such as when the supervisor will be up and running.
Some investors and analysts worry that Europe’s politicians may have lost the incentive to fix things quickly now that market turmoil has subsided. The borrowing costs of countries like Spain have eased since the European Central Bank unveiled in September a new bond-buying program.