That hunt for safety continued to punish the Canadian dollar, which was down 0.16 of a cent to 99.16 cents US in early trading.
U.S. futures were positive as traders awaited the release of the minutes of the latest meeting of the U.S. Federal Reserve for any hints the central bank is contemplating another round of stimulus for a slowing economy.
The Dow Jones industrial futures were ahead 38 points to 12,463, the Nasdaq futures gained 7.5 points to 2,585.75 and the S&P 500 futures rose four points to 1,332.2.
Greece has weighed heavily on buying sentiment since an inconclusive election May 6 left no party with enough votes to form a government. Nine days of talks failed to produce a coalition government and Greeks will go back to the polls on June 17. Greek TV also reported Wednesday that Council of State head Panagiotis Pikramenos will be appointed interim prime minister.
Greece's interim government will not be able to make any internationally binding decisions.
Many Greeks voted for parties that had been on the fringe of the political spectrum that want to see the country abandon the tough austerity measures adopted in return for the huge international bailouts that are propping up Greece.
Without agreeing to another round of austerity measures, it's conceivable that Greece's partners in the eurozone will withhold the next round of bailout cash. An exit from the euro could then become inevitable.
But if Greece leaves the euro, then a precedent would've been set that could be taken up by other countries burdened by high debt levels.
Those worries have resulted in investors demanding higher returns from Spain and Italy.
The yield on Spain's 10-year bond, a gauge of investor concerns, was up at 6.33 per cent, while Italy's rose to 5.85 per cent. Though down on the levels they hit last November, the two rates are uncomfortably near the seven per cent level, widely considered to be unsustainable in the long-run.
The flight from risk continued to drive commodities lower since no one knows how much damage a chaotic Greek exit from the eurozone would have on the broader global economy. But the higher U.S. dollar has also hammered prices for oil and metals. That's because prices are denominated in U.S. dollars and a higher greenback makes oil and metals more expensive for holders of other currencies.
The June crude contract on the New York Mercantile Exchange lost $1.11 to US$92.87, its lowest level since last November.
Copper prices also continued to slide with the July contract down another five cents to US$3.47 a pound, its lowest level since early January. The metal, viewed as an economic barometer since it is used in so many industries, has plunged 10 per cent this month.
Investors also sold off bullion, which was down $18.50 to US$1,538.60 an ounce, a price not seen since late December.
The deterioration in investor confidence has left the TSX at its worst level since early October of last year, down more than 10 per cent from its most recent highs registered at the end of February.
The resource sectors have led the fall with the TSX materials index down 20 per cent year to date and the energy group has fallen about 13 per cent.
European bourses were mainly lower with London's FTSE 100 index down 0.44 per cent, Frankfurt's DAX lost 0.45 per cent and the Paris CAC 40 gained 0.92 per cent.
Earlier, Japan's Nikkei 225 index dropped 1.1 per cent to its lowest close since Jan. 30, amid discouraging economic news. Core private-sector machinery orders fell 2.8 per cent in March, the first drop in three months, Japan's Cabinet Office said.
Hong Kong's Hang Seng plummeted 3.2 per cent and South Korea's Kospi fell 3.1 per cent.
Mainland Chinese shares also lost ground, with the benchmark Shanghai Composite Index falling 1.2 per cent.
On the earnings front, Centerra Gold Inc. (TSX:CG) swung to a US$14.7-million loss in the first quarter as production problems sharply reduced output and sent costs soaring. But the miner declared its first quarterly dividend Tuesday – four cents per share.
A big pre-tax gain on lease terminations allowed Sears Canada Inc. (TSX:SCC) to post a quarterly net profit of $93.1 million in the first quarter despite declining sales. Total revenue was $915.1 million, down 7.8 per cent from the same 2011 period, including a decrease of 6.3 per cent in same store sales.
And in the U.S., agriculture equipment giant Deere and Co. posted a quarterly profit of US$1.06 billion, up 17 per cent from a year ago. Revenue jumped 12 per cent to $10 billion. The company is raising its outlook for the year, with farm receipts expected to hit historic heights.
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