Canadian, U.S. markets tumble on worse than expected jobs data, lower oil prices

| North American markets | International markets | Bonds | Currency | Commodities |

The energy sector led the Toronto stock market to a lower close Thursday amid disappointing data that showed the U.S. unemployment rate at its highest point since 1983.

The S&P/TSX composite index was down 129 points at 10,245.91 as the August crude contract on the New York Mercantile Exchange fell US$2.58 to $66.73 a barrel — its lowest level in a month.

Each of the three major U.S. indices slumped more than 2% in response to data that showed American employers cut a larger-than-expected 467,000 jobs in June, driving the U.S. unemployment rate up to a 26-year high of 9.5%.

The unemployment rate is seen as a key barometer in the U.S. economic recovery and far exceeded the consensus expectation of 365,000 jobs lost.

ScotiaMcLeod adviser Andrew Pyle described the unemployment rate’s slow climb towards 10% as "death by a thousand cuts," but said the data wasn’t as bad as it could have been.

However, Pyle pointed out that the average work week fell by one-tenth of an hour to 33 hours, eliminating the equivalent of another 100,000 positions.

Trading on the New York Stock Exchange was extended by 15 minutes due to a technical glitch earlier in the day. Just before the close, the Dow Jones industrial average had lost 213.95 points to 8,290.11 while the S&P 500 fell 26.05 points to 897.28.

The Nasdaq composite index gave up 49.20 points to close at 1,796.52

U.S. markets will be closed Friday in observance of the Independence Day holiday.

The reaction to the joblessness numbers shows investors are "skittish" and may be rethinking earlier sentiments that sent markets soaring as the economy showed small signs of improvement in the spring, said Kate Warne, Canadian markets specialist at Edward Jones in St. Louis.

"The market’s really been swinging emotionally. There’s little bits of good news and investors are taking that as a sign of all-clear, and then there’s a little bit of bad news and they take that as a sign that the worst is going to happen," Warne said in an interview.

"What investors need to remember is this is what happens at these times. This isn’t unusual — whenever we’re at turning points in the economy, they always take longer and they’re much more erratic than people would like."

The jobless numbers in the U.S. came on the heels of an awful employment picture in Europe.

Unemployment in the 16 countries that use the euro spiked to a ten-year high in May. The seasonally adjusted unemployment rate for the euro zone in May stood at 9.5%.

In other U.S. data, factory orders for May increased 1.2%, slightly higher than the expected 0.9%. However, orders still remained about 20% below where they were in May 2008.

In Toronto, the energy sector fell 4.1% as the price of crude declined for the fifth straight day.

High unemployment has destroyed demand for energy on numerous levels. Employees who have lost jobs or are in fear of losing jobs are driving less and buying fewer goods, many of them petroleum based. Factories have also curbed production and are using less natural gas and electricity.

Suncor Energy Inc. lost $2.21 or 6.3% to $33.16 while its merger partner Petro-Canada fell $2.94 or 6.5% to $41.98.

The loonie gained 0.06 of a cent to 86.04 cents US.

The TSX Venture Exchange added 0.61 points to 1,092.58.

The TSX base metals sector, up 73% during the second quarter, rose 1.7%.

The financials sector lost 1.2%. On Tuesday, debt rating agency DBRS said it was downgrading the preferred shares of the big six Canadian banks.

The gold sector rose 1% as the August bullion contract in New York closed down US$10.30 to $931 an ounce. Goldcorp Inc. gained 94 cents to $41.37, while Barrick Gold Corp. rose 50 cents to $39.65.

(THE CANADIAN PRESS)

North American markets

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	Close	Change	YTD
Dow Jones	8,291.32	-212.74 or -2.50%	-5.53%
S&P 500	896.67	-26.66 or -2.89%	-0.73%
NASDAQ	1,796.52	-49.20 or -2.67%	+13.92%
TSX Composite	10,245.91	-129.00 or -1.24%	+14.00%

International markets

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	Close	Change	YTD
Nikkei	9,876.15	-63.78 or -0.64%	+11.47%
Hang Seng	18,178.05	-200.68 or -1.09%	+26.35%
SENSEX	14,658.49	+13.02 or +0.09%	+51.94%
FTSE 100	4,234.27	-106.44 or -2.45%	-4.51%
CAC 40	3,116.41	-100.59 or -3.13%	-3.06%
DAX	4,718.49	-186.95 or -3.81%	-1.91%

Bonds

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Bonds	$Current	$Previous	%Yield
Cdn. 10-year bond	103.36	103.33	3.35
Cdn. 30-year bond	119.61	119.49	3.85
U.S. 10-year bond	96.88	96.75	3.50
U.S. 30-year bond	98.84	98.89	4.32

Currency

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BoC Close	Today	Previous
Canadian $	0.8604	0.8598
US $	1.1623	1.1630

Euro Spot Rate	Today	Previous
Canadian $	0.6147	0.6130
Euro	1.6267	1.6312

Commodities

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Gold	AM	PM
London Gold Fix ($US)	$936.00	$929.50

Oil	Close	Change
WTI Crude Future (US)	$66.54	-$2.77 or -4.00%

(07/02/09)