August 7, 2009 / 3:02 PM / 10 years ago

CANADA STOCKS-TSX up as banks rebound, but jobs data weighs

* TSX up 0.6 percent at 10,855.03

* Financials lead, but insurers still weak

* Canadian jobs losses worse than expected, U.S. better (Adds details)

By Ka Yan Ng

TORONTO, Aug 7 (Reuters) - Toronto’s main stock index pared early gains at midmorning on Friday as investors weighed contrasting jobs data from Canada and the United States and reconsidered the pace of the economic recovery.

The TSX jumped more than 1 percent right at the opening bell, spurred by the clearest evidence yet that the U.S. economy was turning around as data showed far fewer jobs were lost in July than expected. [ID:nN07385157]

But the index quickly trimmed those gains as investors had second thoughts about the domestic economy, which showed job losses were nearly triple expectations. [ID:nN07253705]

Still, nine of 10 sectors were higher, led by a rebound in the financials group, which rose 0.74 percent.

The hefty financials group, which makes up about one-third of the TSX’s weighting, had tumbled 5.6 percent in the previous session on the back of insurance company news — a dividend cut by Manulife Financial (MFC.TO) and a warning from Sun Life Financial (SLF.TO).

Those two insurers, the top two influential losers, were still being punished by investors on Friday, with Manulife falling 1.5 percent to C$22.03, while Sun Life lost 2.8 percent to C$32.08.

“I don’t think there’s a lot of confidence in the insurance companies. People are still digesting what to do here. A lot of people were in there for the dividends,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

But all five of Canada’s biggest banks were higher, with top influential gainer Royal Bank of Canada (RY.TO) rising 1.6 percent to C$50.91.

At 10:50 a.m. (1450 GMT), the S&P/TSX composite index .GSPTSE was up 61.66 points, or 0.6 percent, at 10,855.03.

The energy group edged up 0.65 percent, shrugging aside a softer tone to oil prices. Shares of Suncor Energy (SU.TO) fell 1.2 percent to C$36.61. Suncor completed its acquisition of Petro-Canada on Saturday and the new shares began trading on Friday in Toronto, following their kick-off on the New York Stock Exchange earlier this week.

The materials group was the sole declining sector, knocked 0.44 percent lower as the price of gold eased. Barrick Gold (ABX.TO), Kinross (K.TO) and Agnico Eagle (AEM.TO) all fell more than 1 percent.

Editing by Rob Wilson

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