Toronto stocks to slide on jobs data, U.S. woes

Fri Jan 11, 2008 8:51am EST
 
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TORONTO Jan 11 (Reuters) - The Toronto Stock Exchange's main index was set to slip on Friday morning, caught in the cross-hairs of surprisingly weak Canadian jobs data and more woes in the U.S. banking and housing sectors.

Eyes will also be on Shaw Communications Inc (SJRb.TO: Quote), Canada's No. 2 cable and satellite TV company, which reported a higher first-quarter profit.

U.S. financial firms dominated early headlines, with Bank of America Corp (BAC.N: Quote) making a surprise bid for struggling mortgage lender Countrywide Financial Corp CFC.N. For details, see: [nN11273490]

A successful takeover of Countrywide by the United States' second-largest bank could be a dash of good news amid the overall U.S. housing crisis, which has weighed on Canadian equities.

But elsewhere in the closely-watched U.S. sector, the New York Times reported that Merrill Lynch & Co MER.N will incur bigger-than-expected mortgage-related losses, amounting to more bad news for the U.S. economy.

U.S. stock futures pointed firmly down.

The United States is Canada's biggest trading partner. Any slowing there would hit the profits of TSX-listed firms going into the fourth-quarter corporate results season, which ramps up later this month.

"Luckily Canada is helped by these rising commodities, but there's still some weakness forthcoming in the United States that might hurt Canadian markets to a degree," said Steve Ibel, institutional equities trader at Beacon Securities in Halifax, Nova Scotia.

The TSX gold sub-sector could get a boost from the underlying price of bullion, which hit another record high near $900 an ounce earlier on Friday. The sub-sector has been the index's darling so far this year, soaring about 18 percent.   Continued...