TSX softens on weak oil; New York markets sharply lower on economic concerns

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

The Toronto Stock Exchange’s S&P/TSX index lost 10.51 points to close at 12,763.99 on Friday after job reports in both Canada and the United States came in below expectations.

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 used to be, up until September, that with weak economic news, everybody would go ‘Hooray! The Fed’s not going to raise rates,’ and off would go the stock markets,” said Colin Cieszynski, chief market strategist at CMC Markets.

“But since September, when we get soft news the markets actually go down on the realization that maybe the economy is not so strong and the outlook for corporate earnings is not so good.”

In New York, the Dow Jones industrial average slumped 211.75 points to 16,204.83, while the broader S&P 500 declined 35.43 points to 1,880.02.

Technology stocks were among the hardest hit on Friday, with the tech-heavy Nasdaq plunging 146.42 points to 4,363.14.

Shares of LinkedIn (NYSE:LNKD) plunged more than 40 per cent as the company released a weak outlook for the year. That’s despite the fact that the company reported what Cieszynski called “spectacular” quarterly earnings.

“Strong fourth-quarter earnings are getting discounted in favour of people focusing more negatively on soft 2016 guidance,” Cieszynski said.

“I think we’re going to see continued volatility in tech as we move through the later stages of earnings reports.”

In commodities, the March contract for North American benchmark crude oil slipped for a second straight day, down 83 cents to US$30.89 a barrel.

The March contract for natural gas rose nine cents to US$2.06 per mmBtu, while April gold added 20 cents to US$1,157.70 a troy ounce and March copper shed three cents to US$2.10 a pound.

Meanwhile, the Canadian dollar slipped 0.85 of a U.S. cent to 71.90 cents US.

—With files from Brian McKenna and the Associated Press.

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