Source: The Canadian Press

The Toronto stock market appeared to be headed for a lower open Friday after a disappointing report showing that U.S. unemployment rose last month.

The bleak November U.S. jobs survey undercut signs that the world’s largest economy has been gaining momentum. Economists had expected a modest gain in employment and the lacklustre news put a damper on premarket trading.

Dow futures were down 57 points at 11,306, Nasdaq futures lost 15 points to 2,172, while S&P 500 futures were up 28.7 points to 1,214.

The report showed the U.S. unemployment rate climbed to 9.8% in November, a seven-month high, as hiring slowed. Employers added only 39,000 jobs last month, a sharp decline from the 172,000 created in October.

It will also likely outweigh a slightly positive Canadian jobs report that found the unemployment rate fell last month.

Unemployment fell three-tenths of a point to 7.6%% in November, despite the economy creating only 15,200 new jobs _ all part time. The jobless rate is the lowest it’s been in almost two years. But the underlying story in the Statistics Canada report is one of overall weakness in Canada’s labour force.

But the agency noted that the decline in the unemployment rate is mostly due to 43,600 Canadians leaving the labour market, perhaps because they have become discouraged. And there were 11,500 fewer full-time jobs in November.

The Canadian dollar had been edging closer to parity before the release of the U.S. jobs report but later was off 0.27 cents to 99.34 cents US.

The new February gold contract made steady gains after the release of U.S. employment data, up $10.20 to US$1,399.5. The March copper contract on the Nymex lost one cent at US$3.97.

The January crude contract lost 50 cents at US$87.50 a barrel on the New York Mercantile Exchange.

Some investors had raised their expectations of the number of jobs added to the economy after a report Wednesday showed private employers were hiring more than economists anticipated.

The report, along with signs Thursday that consumers are spending more this holiday season, helped spark a stock rally that has pushed the Dow Jones industrial average up 356 points over two days.

Economists had expected the economy to add 145,000 new jobs but that the unemployment rate held at 9.6%.

Investors will also get word on U.S. service sector performance and the latest reading on factory orders. Analysts expect faster growth in the service sector but a decline in October factory orders.

On the TSX, investors will weigh in on mixed earnings from Scotiabank (TSX:BNS) and Royal Bank (TSX:RY) after sending the financial sector lower on disappointing earnings from TD Bank (TSX:TD) and CIBC (TSX:CM) on Thursday.

Scotiabank said its fourth-quarter profit was up 21% from the same time last year, rising to just under $1.1 billion, and beating analyst estimates.

Royal Bank (TSX:RY) says its fourth-quarter profits slipped 9% to $1.12 billion or 74 cents per share, down from $1.24 billion, or 82 cents a share, in the same quarter last year. Cash earnings per share were 84 cents, which was below analyst expectations of $1 per share.

Elsewhere on the market, Western Coal Corp. (TSX:WTN) has agreed to be taken over in a deal that values the Vancouver-based company at $3.3 billion. Walter Energy Corp. of Tampa, Fla., (NYSE:WLT), which recently became Western Coal’s largest shareholder, is offering to buy the remaining stock for C$11.50 per share in cash or shares.

In Europe, the FTSE 100 index was down 0.4%, while Germany’s DAX lost 0.3%, and France’s CAC-40 moved 0.6% lower.