TORONTO -- TORONTO -- Stock markets could decline from record highs as the attention begins to turn to quarterly results, an investment specialist said Friday.

"We believe there is potential for a pull back," says Kevin Headland, senior investment Strategist at Manulife Investment Management.

"I don't know we're going to get an actual correction of 10 per cent but definitely we could see some volatility on news flow as companies start to announce earnings and we get perhaps some misses on earnings or at least some negative earnings in the U.S."

Fourth-quarter results have begun to trickle in. Earnings are estimated to decline two per cent in the U.S. to mark the fourth straight quarter of year-over-year earnings declines since the second quarter of 2016, according to FactSet.

As more companies report, the market should pay attention to the fundamentals of corporations as they announce earnings, Headland said in an interview.

"We do not believe that earnings in Q4 really warrant these valuations and these upside markets," he said. "We believe there is going to be weakness in earnings in the first half of 2020 based on underlining fundamentals."

Almost all the equity gains last year can be attributed to multiple expansion with share buybacks contributing to some of the gains amid increased investor sentiment, Greg Taylor, chief investment officer of Purpose Investments wrote in a market commentary.

"Looking to 2020, we don't expect as strong a year as last. We do expect an increase in volatility."

Markets ended the week slightly lower despite starting with fears that the U.S. drone killing of a top Iranian general could spark a Middle East war.

Investors took solace in the U.S. and Iran appearing to decide not to accelerate the conflict after Iran retaliated by firing missiles against Americans at an Iraqi military base.

The S&P/TSX composite index closed down 1.08 points at 17,234.49, a gain of 168.37 points over the week.

In New York, the Dow Jones industrial average was down 133.13 points at 28,823.77 after hitting 29,000 for the first time. It was pushed lower by Boeing losing 1.9 per cent on leaked emails from employees who raised doubts among themselves about the safety of the 737 Max.

The S&P 500 index was down 9.35 points at 3,265.35, while the Nasdaq composite was down 24.57 points at 9,178.86.

The Canadian dollar was trading for 76.62 cents US compared with an average of 76.46 cents US on Thursday after Statistics Canada said the economy added 35,200 jobs in December to beat analyst expectations.

Health care and consumer discretionary were the weakest sectors with cannabis producers Aurora Cannabis Inc. and Hexo Corp. losing 11.2 and 10.3 per cent respectively.

Aritzia Inc. was down 3.5 per cent a day after rising nearly 17 per cent to an all-time close of $24.01 after the Vancouver fashion retailer reported a strong third quarter with profits rising on a 10 per cent increase in revenues.

The key energy sector was lower with Encana Corp. down 2.6 per cent as crude oil prices fell on easing geopolitical risks.

The February crude contract was down 52 cents at US$59.04 per barrel and the February natural gas contract was up 3.6 cents at US$2.20 per mmBTU.

Materials was the best performing sector on the day with First Quantum Minerals Ltd. up 4.7 per cent on higher metals prices.

The February gold contract was up US$5.80 at US$1,560.10 an ounce and the March copper contract was up 1.15 cents at US$2.81 a pound.

This report by The Canadian Press was first published Jan. 10, 2020.