Toronto index set for more losses, jobs, oils eyed

Fri Sep 5, 2008 9:05am EDT
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* Weak U.S. jobs data could hurt Toronto stocks

* TSX index has already fallen 957 points this week

* Further drops in oil and gold add to negative sentiment

TORONTO, Sept 5 (Reuters) - Toronto's main stock market index was seen falling further at the open on Friday after dropping more than 900 points so far this week, with weak commodity prices and more evidence of a slowing U.S. economy likely to rattle investors.

The market is likely to take its cue from U.S. data that showed the labor market in August contracted more than economists had expected, adding to a big drop in nonfarm jobs in July.

Partially offsetting the dreary economic report from the United States, Canada's largest trading partner, was a domestic report showing modest job creation in August after heavy losses in July.

The data helped ease fears that Canada's economy was slowing faster than expected, an impression fanned by a weak July labor report.

"I'm not sure it's wise to trade off these (U.S) numbers, but you really have to follow what the market is doing and what the market is telling me right now is that they are not really happy with another deep monthly decrease," said Steve Ibel, an institutional trader at Beacon Securities in Halifax, Nova Scotia.

While the jobs numbers will likely dominate the mood of the market, investors will also focus on the continued weakness in the key commodity prices.   Continued...