TSX softens on weak oil; New York Markets drop sharply

TORONTO -- North American stock markets turned lower Friday following two days of solid advances amid declining oil prices and renewed concerns over the U.S.

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economic recovery.

At mid-afternoon the Toronto Stock Exchange's S&P/TSX index was down 58.23 points at 12,716.27 after job reports in both Canada and the United States came in below expectations.

In New York, the Dow Jones industrial average slumped 252.57 points to 16,164.01, while the broader S&P 500 declined 38.13 points to 1,877.32 and the Nasdaq plunged 150.27 points to 4,359.29.

In commodities, the March contract for North American benchmark crude oil slipped for a second straight day, down 84 cents to US$30.88 a barrel.

Meanwhile, the oil-sensitive Canadian dollar also retreated, down 0.76 of a U.S. cent at 71.99 cents US.

Elsewhere in commodities, the March contract for natural gas rose nine cents to US$2.07 per mmBtu, while April gold added $2.60 to US$1,160.10 a troy ounce and March copper shed five cents to US$208 a pound.

In economic news, Statistics Canada reported the unemployment rate rose to 7.2 per cent in January. Economists had expected it to be stable at 7.1 per cent.

South of the border, the Labor Department reported that U.S. employers added just 151,000 jobs in January, a sharp deceleration from recent months as companies shed education, transportation and temporary workers. That was below economists' forecasts of a creation of 185,000 jobs, according to data from Factset.

On the positive side, the unemployment rate fell to 4.9 per cent from five per cent, the lowest level since February 2008 and average wages were up 2.5 per cent over the past year to $25.39 an hour.

"It's a rather difficult report to interpret," Russ Koesterich, global market strategist with asset manager BlackRock, said of the employment numbers which came after reports earlier this week pointed to a slowdown in manufacturing in both the United States and China.

"It confirms there has been some deceleration in the U.S. economy. We're not falling off the cliff, but it clearly shows the U.S. economy is not immune to the global slowdown," Koesterich told The Associated Press.

On the other hand, the data showing hourly wages are growing could be an early sign of inflation from the perspective of the Federal Reserve, which might cause the U.S. central bank to keep raising rates even in a slowing economy, Koesterich said.

"You have the possibility of soft growth and monetary tightening, and that's not a great place to be as an investor," he said.


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