CANADA STOCKS-TSX drops as euro-zone jitters undermine jobs data

Fri Oct 7, 2011 5:07pm EDT
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 * TSX ends down 191.71 points, or 1.6 pct, at 11,588.36
 * Index ends week down 0.3 percent
 * Nine of 10 main sectors lower
 * Canada, US jobs better than expected
 * Fitch downgrades Spain, Italy credit
 (Updates to close)
 By Claire Sibonney
 TORONTO, Oct 7 (Reuters) - Toronto's main stock index ended
sharply lower on Friday as surprisingly strong North American
jobs data was overshadowed by downgrades of Spain and Italy's
credit ratings.
 The index's resource-heavy materials sector dropped a hefty
3 percent, energy shares slid 2 percent, and financials were
1.1 percent lower. Among the most heavily weighted decliners,
fertilizer producer Potash Corp POT.TO dived 4.1 percent, oil
company Canadian Natural Resources CNQ.TO fell 4 percent, and
miner Barrick Gold ABX.TO was down 2.3 percent.
 "It's a bit of weakness after a pretty strong move in the
past few days," said Don Vialoux, technical analyst at
JovInvestment Management.
 He said the TSX marked an important low earlier in the
week, followed by a two-day rally, which could point to a
seasonal recovery in equity markets starting earlier this
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended down 191.71 points, or 1.6 percent, at
11,588.36. Nine of its 10 sectors were lower, with telecoms
rising 0.1 percent. The index was down 0.3 percent on the
 Early in the session, the index hit its highest level in
nearly two weeks as data showed U.S. employers hired more
workers than expected in September and job gains for the
previous two months were revised higher, easing recession
fears. [ID:nOAT004877]
 Canada created six times as many jobs than forecast in
September, once again outshining the United States.
 "It's been a pretty profitable week and somewhere along the
way we're going to give back a little bit," said Fred Ketchen,
director of equity trading at ScotiaMcLeod.
 The risk trade was not helped by the debt downgrades of
euro zone members Spain and Italy by Fitch, which came before a
European summit on Sunday that is aimed at shoring up the
financial sector. [ID:nL5E7L714R]
 Analysts said that overall market conditions, including the
ongoing debt crisis in Greece, would likely keep Canadian
stocks in check over the coming weeks. Investors will also
closely watch a new round of U.S. quarterly earnings reports,
which begins next week.
 Earnings expectations have already been lowered, so if
stocks respond on the upside, "it will be a clear indicator
that we're entering a period of seasonal strength," Vialoux
 ($1=$1.04 Canadian)
 (Editing by Peter Galloway)