TSX ends lower amid weak jobs data

The TSX Venture Exchange moved up 7.57 points to 1,650.01.

The Canadian dollar was down almost a full U.S. cent amid deeply disappointing employment data for Canada, with October recording the biggest loss in jobs since March 2009.

Economy sheds 54,000 jobs in October

The loonie fell 0.84 of a cent to 98.36 cents US after Statistics Canada reported that the economy shed 54,000 jobs overall, most of them in manufacturing and construction.

Economists had expected a moderate increase in employment of 15,000 after September’s surprising 61,000 pick-up, although that was somewhat inflated by returning education workers.

The jobless rate came in at 7.3%, 0.2 percentage points higher than in September.

New York markets were also lower after the U.S. Labour Department reported that the economy created about 80,000 jobs last month, compared with expectations of 95,000. The jobless rate was nine per cent, down from 9.1% in September.

The U.S. report also revised higher data from the previous two months, showing that an additional 104,000 jobs had been created in August and September.

“If you take the optimistic view that the job situation isn’t worsening, then that just reaffirms that the U.S. economy continues to grow, albeit at a much slower pace than what people would hope,” said Phillip Petursson, director of institutional equities at Manulife Global Investment Management.

But European worries trumped the jobs report and the Dow Jones industrial average closed down 61.23 points to 11,983.24.

The Nasdaq composite index was down 11.82 points to 2,686.15 while the S&P 500 index declined 7.92 points to 1,253.23 as investors looked to Greece where prime minister George Papandreou faced a confidence vote in a political drama that threatened to hobble efforts by European leaders to contain the debt crisis.

Markets were volatile earlier this week after Papandreou stunned markets by calling a referendum on the country’s bailout package.

His plan, which he recinded on Thursday, nonetheless increased investor fears of a disorderly Greek debt default and the country’s possible exit from the eurozone.

“That continues to weigh on markets,” added Petursson.

“You know, it’s unfortunate that things seemed to be moving ahead at a nice pace last week and then at the start of the week Greece just throws this huge cloud of uncertainty over everything at probably the worst possible moment.”

Meanwhile, leaders of the world’s 20 most powerful economies wrapped up a two-day meeting without agreeing on how to increase the firepower of the International Monetary Fund so that it can help stem the European debt crisis. But they did acknowledge that its resources should be boosted.

Worries about the European debt crisis pushed the TSX down 111.26 points or 0.88% this week while the Dow industrials gave back 247.87 points or 2.02%.

Possible damage to the eurozone’s financial sector and the latest sign of weakness in the Canadian economy pushed the TSX financial sector down 1.39% on Friday. Royal Bank (TSX:RY) gave back $1.13 to $45.85 and Manulife Financial (TSX:MFC) lost 32 cents to $12.79.

Commodity prices had weakened following the U.S. jobs report but the December crude contract on the New York Mercantile Exchange ended the session up 19 cents at US$94.26 a barrel.

The TSX energy sector lost 0.63% as Canadian Natural Resources (TSX:CNQ) dropped 50 cents to C$37.73 and Suncor Energy (TSX:SU) dropped 31 cents to C$32.89.

The base metals sector gained 0.94% even as the December copper contract on the Nymex closed two cents lower at US$3.56 a pound. First Quantum Minerals (TSX:FM) rose 46 cents to C$22.81 and Ivanhoe Mines (TSX:IVN) climbed 99 cents to C$22.82.

The gold sector was little changed while bullion prices dipped with the December contract down $9 to US$1,756.10 an ounce. Barrick Gold Corp. (TSX:ABX) was down 27 cents at C$52.23.

Centerra Gold Inc. (TSX:CG) reported a five-fold increase in third-quarter profits on Thursday, citing an increase in sales and higher realized prices for gold for the big improvement. The Toronto-based miner earned US$83.8 million or 35 cents per share while revenue increased to US$278.4 million from $119.9 million in the same period last year. Its shares added a penny to $21.03.

The industrials sector was also weak and Air Canada (TSX:AC.B) shares were four cents lower at $1.36. The airline beat expectations even though it lost $124 million or 45 cents per share in the summer period. Excluding foreign exchange losses, its adjusted profit was $270 million, or 55 cents per share, seven cents above analyst expectations.

In other earnings news, Canadian Real Estate Investment Trust (TSX:REF.UN) reported its net profit rose nearly 10% to $11.3 million in the latest quarter as the company benefited from property acquisitions. Its units gained 10 cents to $35.54.