Source: The Canadian Press

The Toronto stock market closed lower Friday, as oil and gold prices fell back on hopes for an end to the political protests in Egypt and an American dollar that strengthened despite data showing far less U.S. job creation last month than expected.

The S&P/TSX composite index declined 49.5 points at 13,791.85 as investors also took in a strong Canadian employment report, while the TSX Venture Exchange gained 6.38 points to 2,370.29.

The U.S. Labour Department reported that the American economy created 36,000 jobs in January, far less than the 130,000 or so that had been expected.

But the U.S. unemployment rate fell from 9.4% in December to nine per cent in January.

Revisions also showed that the U.S. economy created about 40,000 more jobs than previously thought in November and December.

The Canadian dollar gave back some early gains and but closed up 0.26 of a cent at 101.17 cents US.

The loonie had been higher after Statistics Canada reported that the Canadian economy generated just over 69,000 new jobs last month, spread across most of the country and evenly split between full-time and part-time. That was far higher than expectations for between 15,000 and 21,000 new jobs.

However, Canada’s unemployment rate rose two-tenths of a point to 7.8% as more people returned to the workforce.

The energy sector led decliners, down 1.45%. Oil prices eased after the Obama administration was discussing several possibilities with Cairo, including one for Egyptian President Hosni Mubarak to leave office now and hand over power to a military-backed transitional government.

Later in the day, U.S. president Barack Obama said that Mubarak needs to listen to the Egyptian people and make a judgment about the best way forward.

However, Obama declined to say whether he thought Mubarak should leave office now or stay in power until elections can be held.

The March crude contract on the New York Mercantile Exchange lost $1.51 to US$89.03 a barrel. Canadian Natural Resources (TSX:CNQ) was down 53 cents at C$44.15, while Suncor Energy (TSX:SU) declined $1.36 to $40.61 after Raymond James downgraded the stock to market perform from outperform.

The political unrest in Egypt has left a significant mark on oil prices, which are up about four per cent over the past week amid concerns that political instability could spread to oil-rich countries in the Middle East.

The base metals sector was off 0.37% even as copper moved further into record territory, with the March contract on the Nymex rising four cents to US$4.58 a pound. Teck Resources (TSX:TCK.B) declined $1.17 to C$61.76 while Quadra FNX Mining (TSX:QUX) lost 31 cents to $14.45.

The gold sector also fell back as the April gold contract declined $4 to US$1,349 an ounce. Barrick Gold Corp. (TSX:ABX) lost 77 cents to C$47.51 while Kinross Gold (TSX:K) faded 44 cents to C$16.75.

The financials group was the leading advancer, up 0.45% as TD Bank (TSX:TD) gained 60 cents to $78.23 while Manulife Financial (TSX:MFC) ran up 19 cents to $18.84.

New York markets were slightly higher as investors tried to give the U.S. job creation numbers the benefit of the doubt because of fierce winter weather.

“The severe winter weather that occurred during the sample week appears to explain most of the weakness,” said Paul Ashworth, chief U.S. economist at Capital Economics.

“According to the alternative household survey, 707,000 people said they couldn’t work because of the weather last month, more than double the 283,000 average for a normal January.”

The Dow Jones industrial average gained 29.89 points to 12,092.15. The Nasdaq composite index rose 15.42 points to 2,769.3 while the S&P 500 index climbed 3.77 points at 1,310.87.

The TSX gained 2.6% this past week, paced by gains in energy, mining and financial stocks while strong readings on the U.S. manufacturing and service sectors helped push the Dow industrials up 2.2%.

In earnings news, shares in construction company Aecon Group Inc. (TSX:ARE) tumbled almost 11% to $8.78 after the company predicted pre-tax operating losses of between $56 million and $59 million because of changes to an order on a Suncor Energy (TSX:SU) oilsands project.

Brookfield Infrastructure Partners (TSX:BIP.UN) credited a big gain related to its merger with Prime Infrastructure in December for posting a major increase in earnings. The Bermuda-based company, which reports in U.S. dollars, earned US$416 million, or $3.48 per unit, compared with a loss of US$45 million, or 58 cents per unit, in the same 2009 quarter. Its units added 40 cents to $22.25.

Domtar Corp (TSX:UFS) said its fourth-quarter profits increased to US$325 million from $124 million a year ago as the paper and wood products producer overcame production issues and benefited from higher average prices. However, earnings missed expectations and its shares fell $1.25 to $86.96.