Source: The Canadian Press

Poorly received earnings reports from two influential Canadian insurers and fresh signs of slow job growth in the United States combined to send the Toronto stock market lower on Thursday.

The S&P/TSX composite index lost 70.28 points to 11,774.77 and the TSX Venture Exchange moved 5.61 points higher to 1,459.07.

The Canadian dollar was up a tenth of a cent to 98.37 cents US.

The TSX financial sector was the biggest TSX decliner, down 2.2%.

Shares in Manulife Financial Corp. (TSX:MFC) fell $1.80 or 11.25% to $14.20 on a heavy trading volume of 28.4 million shares after the insurance giant booked a huge $2.4-billion loss on lower equity markets and interest rates. That compared with net income of $1.8 billion in the year-earlier period.

Sun Life Financial Inc. (TSX:SLF) reported Wednesday after close that earnings came in at $213 million compared with profits of $591 million a year ago and its shares fell $1.33 or 4.65% to $27.27.

“Yes, the insurers are taking it on the chin right now which you would expect them to do,” said Chris King, vice-president and portfolio manager at Morgan, Meighen and Associates, pointing out that stock markets were down sharply year to date at the end of the last quarter.

“So, I’m not surprised they’re putting out bad results. You have to look at the whole U.S. market. People are going to defer buying new financial products if they’re trying to get food and necessities on the table.”

Canadian banks also fell in the wake of the Manulife report with Royal Bank (TSX:RY) down 91 cents to $52.67.

Investor sentiment also soured after the U.S. Labour Department reported that initial claims for unemployment insurance rose to 479,000 last week. Economists had expected a small drop in claims to 455,000.

The report came out a day before July employment data for the United States and Canada is released.

With unemployment the biggest hurdle to a stronger U.S. recovery, traders are expecting to see private sector job growth at a modest 90,000 in July.

Meanwhile, Statistics Canada is expected to report that the domestic economy cranked out another 15,000 jobs last month.

The Canadian earnings story was more positive with BCE Inc. (TSX:BCE), the country’s largest telecommunications company boosting its annual dividend 5% to $1.83 a share. The company reported that quarterly earnings came in at $590 million, up 71% from a year earlier.

BCE added that it sees 2010 revenue growth at its main subsidiary, Bell Canada at between 2 and 3%, higher than its previous estimate of 1 to 2% and its shares rose 56 cents to $32.16.

King added that the dividend rise was all the more important considering the heightened competition facing BCE and other big telecoms from smaller wireless players.

“George Cope is a great CEO, he’s doing exactly the right things there,” he said.

“They keep raising their dividend, which indicates confidence. So for a legacy player who is kind of wired down by all the Lilliputians, with all those new entrants out there, to have that confidence is kind of impressive.”

The base metals sector declined 1.79% as the September copper contract in New York slipped five cents to US$3.35 a pound.

HudBay Minerals Inc. (TSX:HBM) fell 80 cents to $13.15 even as it said that its gold business could soon rival mid-tier producers of the precious metal as it fast-tracks development of a key deposit in northern Manitoba that could double its production.

The gold sector was little changed as the December bullion contract on the New York Mercantile Exchange rose $3.40 to US$1,199.30 an ounce.

The energy sector dipped 0.14% as oil prices slipped for a second day after data showed rising gasoline inventories in the United States. The September crude contract on the Nymex declined 46 cents to US$82.01 a barrel. Suncor Energy (TSX:SU) fell 29 cents to C$34.18.

The jobless insurance claims data helped push New York’s Dow Jones industrials down 5.45 points to 10,674.98,

The Nasdaq composite index fell 10.51 points to 2,293.06 while the S&P 500 index slipped 1.43 points to 1,125.81.

In other earnings news, Air Canada (TSX:AC.B) posted a net loss of $203 million in the second quarter on deeper foreign exchange losses, compared with net income of $155 million a year ago. Since Air Canada operates around the world and collects much of its revenues in U.S. dollars and foreign currencies, a stronger loonie reduces top-line revenues on its books.

Operating revenues increased to $2.63 billion from $2.33 billion and Air Canada shares dropped 10 cents to $2.20.

WestJet Airlines Ltd. (TSX:WJA) shares lost a penny to $12.98 as the carrier reported a second-quarter profit of $21 million, more than doubling its year-ago net earnings as revenue increased 15%. The airline said it believes the Canadian economy “needs to rebound further before it can support more new domestic capacity growth.”

Research In Motion (TSX:RIM) fell another $1.18 to $53.06 as the U.S. State Department said it was trying to broker a compromise between the BlackBerry maker and foreign governments that say the devices pose a security risk. Its stock is down 6.5% this week as several nations, including the United Arab Emirates, Saudi Arabia and Indonesia have announced or are contemplating bans on some Blackberry features.