CANADA STOCKS-TSX stung by weak U.S. jobs data as oils drop

Fri Jul 8, 2011 5:04pm EDT
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 * TSX falls 0.26 percent to 13,371.70
 * Seven index sectors ease, led by energy
 * Canada's bright jobs data clouded by U.S. gloom
 (Updates to close)
 TORONTO, July 8 (Reuters) - Toronto's main stock market
index fell on Friday as disappointing U.S. jobs data for June
hit sentiment, though the decline was tempered by hopes the
setback to economic recovery was temporary.
 Figures showed U.S. employment growth ground to a halt in
June, sending stock market investors scurrying to sidelines to
gauge their next moves.
 "That definitely took some wind out of the sails of this
rally we've had the last couple of weeks. It seems the market
is pretty shallow," said Youssef Zohny, portfolio manager at
Van Arbor Asset Management.
 "Expectations for the U.S. economy over the last month or
so have been fairly low so it wasn't too surprising to see weak
jobs numbers," he said. "Most investors are taking that in
stride and really looking towards the second half of the year
to hopefully see some improvement in the U.S. economy."
 The U.S. data contrasted sharply with Canadian employment
figures for June, which showed 28,400 jobs were created,
compared with the 15,000 expected by markets. The Canadian
unemployment rate was unchanged at 7.4 percent.
 [ID:nOAT004829] [ID:nN1E767019]
 The index's energy group was the main sector drag, falling
0.81 percent as the price of U.S. crude oil lost more than 2
percent as markets reacted to the bleaker U.S. economic
 Canadian Natural Resources (CNQ.TO: Quote), down 3.14 percent at
C$40.36, was the biggest overall decliner.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE fell 34.30 points, or 0.26 percent, to close at
13,371.70. Seven of its 10 main groups were lower.
 Trading volume was lower than usual, with about 128 million
shares changing hands, not much more than on Monday, when U.S.
markets were closed for the Independence Day holiday.
 Despite the day's drop, the index is up 0.53 percent since
last Thursday. The market was shut for Canada Day last Friday.
It has risen seven of the last nine sessions and has had a
mid-range performance against its U.S. counterparts.
 Upcoming earnings season will be a new factor that could
influence the market, while Chinese inflation and trade figures
for June over the next week may also set the tone for global
 "I still feel our market is more influenced more and more
by China than what goes on in the U.S. because of the commodity
bent," said Ian Nakamoto, director of research at MacDougall,
MacDougall & MacTier.
 "As long as the U.S. doesn't go into recession, there's a
steady demand for our commodities."
 If the Chinese economy has a soft landing, commodity demand
will remain healthy and support Canada's resource-laden stock
market, he said.
 European Goldfields EGU.TO jumped about 11 percent to
C$13.65 after Greece granted a long-awaited permit to mine for
gold in the country's north, a move set to turn the
London-based firm into the European Union's largest primary
gold producer. [ID:nLDE7670OL]
 Shares of Potash Corp (POT.TO: Quote) rose sharply, up 2.56
percent to C$56.89 and the stock was the most influential
advancer. It was driven by strong gains in corn prices. Corn
futures on the Chicago Board of Trade rose on the back of
active export sales of U.S. corn to China and concerns around
weather related issues.
 ($1=$0.96 Canadian)
 (Reporting by Ka Yan Ng; editing by Peter Galloway)