TORONTO - Stock markets are selling off sharply as dreadful unemployment numbers deepen pessimism about the economy.
Toronto's S&P/TSX composite index was down 190.17 points to 7,867.65 late in the morning as investors took in grim Canadian and U.S. data.
Statistics Canada reported the economy shed 70,600 jobs last month, the biggest one-month drop since 1982, and the unemployment rate rose to 6.3 per cent.
New York's Dow Jones industrial average surrendered 211.62 points to 8,164.62 after the U.S. Labour Department tallied American job losses at 533,000, far more than the 320,000 economists had expected. The U.S. jobless rate increased two-tenths of a percentage point to 6.7 per cent.
Falling commodity prices and the weak employment report, against a backdrop of political uncertainty, sent the Canadian dollar down to a four-year low of 76.88 cents US. Later in the morning the currency was down 1.18 cents at 77.06 cents, extending the previous day's 1.54-cent slide.
The TSX energy sector fell 5.2 per cent as the January crude contract in New York slid $1.83 to US$41.84 a barrel, down for a sixth session on growing worries about demand in the face of worsening economic conditions.
The U.S. employment report "was much worse than was expected and represents wholesale capitulation -- the threat of a widespread depression is now real and present," declared Peter Morici, a business professor at the University of Maryland.
The TSX Venture Exchange was 14.3 points lower to 683.53.
New York's Nasdaq composite index lost 27.1 points to 1,418.46 while the S&P 500 declined 20.95 to 824.27.
The Toronto financial sector was down slightly as Canada's largest bank reported a 15 per cent decline in quarterly profit, but still managed to earn over $12 million a day. The Royal Bank of Canada (TSX:RY) earned $1.12 billion in the fourth quarter of the banking year, as revenue sagged 10 per cent to $5.07 billion. Its shares moved down 40 cents to $36.77.
Laurentian Bank's (TSX:LB) fourth-quarter profit edged down to $27.3 million from $30.2 million a year ago. Its shares were down 21 cents to $35.32.
Elsewhere in the sector, Manulife Financial (TSX:MFC) headed up 34 cents to $19.81.
BCE Inc. (TSX:BCE) was down 28 cents to $22.67 after the telecom company denied rumours that the investment group led by the Ontario Teachers' Pension Plan is proposing to take a minority holding. BCE stock had risen four per cent Thursday on the speculation.
The base metals sector was slightly lower as cuts in resource-industry capital spending continued. Thompson Creek Metals Co. (TSX:TCM) is slashing its 2009 capital budget to $69 million from $300 million, as it puts off expansion of the Endako molybdenum mine in B.C. Its shares were unchanged at $3.45.
The base metals sector moved down almost four per cent as March copper prices moved down 7.45 cents to US$1.395 a pound. Teck Cominco Ltd. (TSX:TCK.B) lost 18 cents to $3.87 and Sherritt International (TSX:S) moved down 27 cents to $2.80.
The gold sector faded 6.7 per cent as the February bullion contract declined $17.40 to US$748.10 an ounce. Goldcorp Inc. (TSX:G) was $2.69 lower to $26.16.
The latest job statistics come as the Canadian Auto Workers union says General Motors Canada will lay off a shift at its Oshawa car plant in early February, adding 700 to the auto industry's thousands of Canadian job losses. Meanwhile, auto executives are opening their books to federal and provincial officials and outlining a restructuring plan in hopes of new subsidies.
In Washington, the bosses of the Detroit Three automakers face a second day of congressional hearings as they plead for US$34 billion.
Optimism on some overseas markets following Thursday's massive interest rate cuts in Europe deflated on the discouraging U.S. job numbers.
The FTSE 100 was down 2.3 per cent in London, while Germany's DAX declined 4.35 per cent and the Paris CAC-40 was down 5.65 per cent.
Japan's Nikkei stock average closed flat, slipping 6.73 points to 7,917.51, but Hong Kong's Hang Seng gained 2.5 per cent.
