TSX tumbles on soft jobs data, global growth fears

Fri Jul 6, 2012 11:20am EDT
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* TSX down 126.74 pts, or 1.1 pct, at 11,690.29
    * Financials, resource shares lead losses
    * Soft U.S., Canada jobs data hurts markets
    * Global growth fears spook investors

    By Jon Cook
    TORONTO, July 6 (Reuters) - Toronto's main stock index fell
sharply early on Friday, led by financial and resource shares,
in the wake of underwhelming jobs data in Canada and the United
States and after the head of the International Monetary Fund
expressed concern about the global economy.
    U.S. employers likely quickened the pace of hiring last
month but not enough to allay worries that Europe's debt crisis
is shifting the economy into low gear. 
    In Canada, job growth slowed in June for a second straight
month in a reality check after outsized employment gains earlier
this year, firming the market's view that the Bank of Canada
won't act soon on recent hints of a rate hike. 
    "They're not robust numbers," said Fred Ketchen, director of
equity trading at ScotiaMcLeod.
    "Economic activity in the U.S. is going nowhere fast. If
we're depending upon an uptick there in order to spur us on,
chances are it isn't going to come, at least in the short-term."
    All of Canada's 10 main sectors fell. Losses were led by the
heavyweight financials group, which dropped 1.1 percent.
    Top lenders Royal Bank of Canada dipped 1.5 percent
to C$52.74, Toronto-Dominion Bank sank 0.9 percent to
C$79.21 and Bank of Nova Scotia was down 1.1 percent at
    Around 11 a.m. (1500 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 126.74 points, or 1.1
percent, at 11,690.29.
    Adding to the gloomy sentiment, an index of purchasing
activity in the Canadian economy hit its lowest level in almost
a year. The Ivey Purchasing Managers Index fell to 49.0 in June
from 60.5 in May, its lowest since July, 2011. 
    The Canadian oil and gas and materials sub-indexes both fell
more than 1.5 percent as U.S. crude futures retreated below $85
a barrel and copper and gold prices slumped.  
    The most influential decliners included Suncor Energy
, off 2 percent at C$29.78, Canadian Natural Resources
, which dropped 2.9 percent to C$26.74, Potash Corp
, down 1.8 percent at C$45.32, and Teck Resources
, which slid 2.7 percent to C$32.06.
    The weak jobs data came a day after China, the euro zone and
Britain all loosened monetary policy, signaling growing alarm
about the world economy. 
    The central bank action failed to impress investors on
Friday, pushing Spanish borrowing costs back up to unsustainable
levels reached before last week's European Union summit took
measures designed to ease the pressure.
    Investors were also spooked after IMF chief Christine
Lagarde said the world economic outlook had deteriorated as both
developed and big emerging nations show signs of slowing down.
    "We've got growth worries," said Ketchen. "Given the fact
that there's a whole lot of places that have instituted some
kind of stimulus measures, so far it hasn't produced positive