Markets recover from Greek debt concerns

North American financial markets on Thursday recovered from their earlier same-day lossesafterthe European Union increased its estimate of the size of Greece's debt and deficit.

The loonie finished lower against the greenback as currency traders retreated to the perceived lower risk of holding American dollars.

At its official close,the Canadian dollar wasworth an even 100.00 cents US,down .08 of a cent from Wednesday's close.

The S&P/TSX composite index closed up 26.31 at 12,160.87.

In New York, the Dow Jones industrial average ended up 9.37 at 11,134.29.The S&P 500 was higher by2.74 points to 1,208.67, while the Nasdaq finishedhigher by 14.46 points at 2,519.07

A report from the European Union's statistics office released Thursday showed that Greece's deficit in 2009 equalled 13.6 per cent of its economic output and could be further revised by up to 0.5 percentage points.

It had previously predicted 12.9 per cent.

The agency also revised the ratio of government debt to GDP to 115.1 per cent, up from 113.4 and the second highest in the EU after Italy.

The deficit revision led rating agency Moody's to downgrade Greece's debt Thursday.

The downgrade will likely make it even more difficult for the cash-strapped Greek government to tap the bond markets for money. The government has insisted it prefers that to resorting to a bailout from the EU and the International Monetary Fund.

"Greece is in the midst of another hellish week and now faces no choice but to seek to formally activate the European rescue package," said Ben May, European economist at Capital Economics.