September 5, 2008 / 1:09 PM / 10 years ago

Toronto index set for more losses, jobs, oils eyed

* 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.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE has lost 957 points so far this week as weakening oil and metal shares weighed on the market. In Thursday’s session the TSX slipped 323.58 points.

The index’s key materials and energy groups account for more than 60 percent of its overall weighting.

“Initially we are going to come down here. It is just a question at what level the bargain hunters come in,” said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier.

“There is no doubt there is a bit of panic selling out there right now.”

The weak price for oil was expected to exacerbate the declines on Friday as the price for the commodity was down 0.9 percent at $106.94 a barrel on falling demand and a stronger U.S. dollar.

Gold could also weigh on the market as the precious metal fell under the key $800-an-ounce mark also on the strong U.S. dollar and falling oil prices.

Among individual stocks, Bombardier Inc (BBDb.TO) could see interest after it said its two key division won orders worth $236 million.

Bombardier dropped 7 percent on Thursday, despite announcing quarterly results that topped expectations, after warning that demand for corporate jets could slow. ($1=$1.07 Canadian) (Reporting by Scott Anderson; Editing by Frank McGurty)

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