TSX poSTS firST loSS of The new year

Canada’s benchmark index posted its first loss of the new year on Friday, despite labour gains showing the U.S. economy continuing to strengthen.

The S&P/TSX composite closed down 48.76 points, or 0.40 %, to 12,188.40. It was the first time in the past six sessions the benchmark index has lost ground.

The decline came as strong job growth was reported in the U.S. in December, with the economy adding far more jobs than expected — 200,000 compared with economists’ estimates of 150,000, sending the unemployment rate to a three-year low.

“It’s definitely a solid report, but not a blowout surprise,” Alan Gayle, a senior strategist at Ridgeworth Capital Management in Richmond, Virginia, which oversees about $44 billion, said.

“The drop in the unemployment rate is good news, but it may reflect sluggishness in the labour force growth and it suggests that from a policy perspective we still have a lot of work to do.”

North American markets got off to a good start in the first week of 2012, with the Tsxrising 1.95 %, the Dow Jones industrial average adding 1.17 % and the Nasdaq climbing 2.65 %.

Commodity prices fell in sympathy with the markets’ tepid response to Friday’s jobs numbers, sending oil down US25¢ to US$101.56 a barrel and gold down US$3.30 to US$1,616.80 an ounce.

“We should keep our expectations on a short leash,” Tdeconomics said. “Risks to the outlook remain tilted to the downside, dominated by a grim European outlook and its potential ripple effects on this side of the Atlantic.”

The Canadian dollar was off 75 basis points to US97.37¢ after Statistics Canada reported Friday that the unemployment rate climbed in December for the third straight month to 7.5 %. During the month, the economy created fewer jobs than expected in December — 17,500 compared with forecasts of 20,000.

Markets also cast a nervous glance at Europe and its continuing debt crisis after Fitch Ratings cut Hungary’s debt to a “junk” rating.

“There were a lot of fireworks earlier in the week and perhaps there’s a little bit of nervousness going into the weekend with Europe and Iran as concerns,” Jim Russell, regional investment manager for U.S. Bank Wealth Management in Cincinnati, said.

In the U.S., the Dow Jones industrial average fell 55.78 points, or 0.45 %, to 12,359.52 while the Nasdaq composite index added 0.16 %, or 4.36 points, to 2,674.22.

Overseas, London’s FTSE added 0.45 % to 5,649.68, the Paris CAC fell 0.24 % to 3,137.36 and Frankfurt’s DAX lost 0.62 % to 6,057.92.