CANADA STOCKS-TSX drops sharply as oil prices skid

Fri Jan 9, 2009 10:58am EST
 
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* Toronto's key index pushed lower after early gain

* Lower oil prices blamed for bulk of market's skid

* Canadian and U.S. economies shed more jobs in December (Adds details)

By Frank Pingue

TORONTO, Jan 9 (Reuters) - Toronto's main stock index was down at midmorning on Friday as oil prices dropped on weak U.S. jobs data, undermining the resource-heavy index's early gains.

The heavyweight energy sector led the market's decline with a 3 percent fall as the price of oil, a key Canadian export, slipped below $40 a barrel.

"Oil prices are a little weaker and that's creating some of the negativity here," said Irwin Michael, portfolio manager at ABC Funds. "Plus people are generally negative. You pick up the newspapers and it tends to be more negative than positive and in consequence people are fearful."

At 10:40 a.m. (1540 GMT), the S&P/TSX composite index .GSPTSE was down 165.71 points, or 1.8 percent at 9,055.87. Just after the open the index rose 45.93 points to 9,267.51.

Nine of the TSX's 10 sectors were in negative territory. The information technology group, up 1 percent, was the only sector in positive territory as it bounced back after two straight sessions of sharp losses.   Continued...