Canada stocks end lower as investors eye Greece

NEW YORK (MarketWatch) � Canadian stocks closed lower Friday after tallying gains over the past two trading sessions, as investors opted to fare safe into a long weekend and wait for news on Greece�s bailout next week.

The S&P/TSX Composite Index CA:GSPTSE �lost 27.29 points, or 0.2%, to close at 12,458.30. The benchmark index, which had tallied a two-session climb of 1.1%, finished the week with a 0.6% gain.

/quotes/zigman/20942 GSPTSE 12,062.44, -0.07, -0.0006%

Analysts said despite growing optimism that Greek will secure a second bailout package and strength in the U.S stock market, Canadian investors preferred to wait for Greece�s crucial test on Monday, when Euro finance ministers meet to discuss the bailout. Read more on Greece.

Also on Monday, the Toronto stock market will be closed for Ontario�s Family Day holiday when the U.S. markets are closed for the Presidents Day holiday.

�Investors may want to sit on their hands and see what transpires next week,� said Millan Mulraine, economic strategist at TD Securities. �They are not going to try to be heroic, just going into a long weekend neutral and flat.�

On Friday, the U.S. leading economic indicators increased for a fourth month, to 0.4% in January, pointing to �somewhat more positive economic conditions in early 2012,� said the New York-based Conference Board. Read about U.S. leading indicators.

Click to Play U.S. market crests higher; Dow near 4-year high

Stocks rise in tandem with optimism for a second bailout for Greece, extending gains for a second session.

The U.S. consumer price index rose 0.2%, the highest rate since September, though slightly below economists� expectations. Read more on U.S. CPI.

In Canada, leading indicators for January rose by 0.7%, according to Statistics Canada � stronger than market consensus.

�We remain cautious towards the Canadian outlook, although there are some signs that a decent pace of growth can be sustained going forward,� said Mazen Issa of TD Securities, in research note. �Much of this will depend however on the pace of U.S. economic momentum and how the events in Europe unfold.�

Canada�s annual inflation rate edged up in January but analysts said the increase is unlikely to cause the Bank of Canada to adjust interest rates in 2012.

Fairfax, Enbridge shares fall

Lackluster earnings sent stocks in most major subsectors tumbling.

Shares of Fairfax Financial Holdings Ltd. CA:FFH �fell 4.3% after the insurance and investment company posted its fourth-quarter loss of $770.8 million, a 56% increase from the loss a year ago.

Cott Corp. CA:BCB �also fell 4.3% after the soft drink producer reported a quarterly loss in the final quarter of 2011.

Energy stocks were mixed on earnings, but traders also assessed news of acquisitions in the resource sector.

Calgary-based Enbridge Inc. CA:ENB �fell 4.1% on the firm�s lower-than-expected fourth-quarter earnings.

Shares of Encana Corp. CA:ECA �lost 0.9%, following the company�s announcement that it is selling a 40% stake in its British Columbia gas resources to Japan�s Mitsubishi Corp. for $2.9 billion.

PetroBakken Energy Ltd. CA:PBN �shares increased 5.3%. The company is selling some non-core Saskatchewan light-oil assets for C$427 million ($428 million) so it can pay down debt and boost spending.

XX:TTTK The S&P/TSX Capped Information Technology Index XX:TTTK � declined 0.2%, with shares of Research in Motion Ltd. CA:RIM �sliding 2%.

In the financial sector, Sun Life Financial Inc. CA:SLF �closed down 0.6%. The firm�s shares were downgraded to hold from buy by Desjardins Securities analysts, who said the firm�s dividend could be at risk if interest rates rose.