TSX heads for lower open: traders look to jobs data, sliding gold prices

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TORONTO - The Toronto stock market headed for a lower open Friday ahead of key jobs data coming out of Canada and the U.S.

The Canadian dollar was down 0.38 of a cent to 100.83 cents US as the American currency strengthened in the wake of indications that the Federal Reserve could wind up its bond buying stimulus program by the end of the year.

U.S. futures were flatlined ahead of the release of the non-farm payrolls report at 8:30 a.m. EST. Statistics Canada was due to report its jobs report at the same time.

The Dow Jones industrial futures slipped three points to 13,316, the Nasdaq futures gained 5.5 points to 2,731 while the S&P 500 futures edged up 0.25 of a point to 1,453.75.

Traders looked to the Labour Department to announce that about 150,000 jobs were created during December on top of 138,000 in November. Expectations rose after payroll firm ADP reported Thursday that the U.S. private sector created 215,000 jobs last month.

Canadian job growth was expected to pull back sharply after 59,000 jobs were created during November. Statistics Canada is looking for the economy to have cranked out about 5,000 jobs during December.

A relief rally that followed the passage of legislation that averted big tax hikes and spending cuts in the United States stalled Thursday after the release of minutes from the Fed's latest policy meeting last month.

These showed that policymakers expressed broad support for the Fed’s plan to buy bonds to support the U.S. economy. But there was a split over how long to continue the bond purchases. Some of its voting members thought they would continue through this year, while others thought they should be slowed or stopped before the end of 2013 amid concerns that the continued bond purchases, known as quantitative easing, would destabilize the economy.

The mining sector was expected to lead TSX losses as speculation over what the Fed may do sent gold prices tumbling with the February bullion contract on the New York Mercantile Exchange down $39.40 to US$1,635.20 an ounce.

The Federal Reserve's quantitative easing program has involved printing more dollars to buy up bonds. The program has been supportive of gold prices since bullion looked attractive as an inflation hedge.

A stronger U.S. dollar also punished commodity prices. That's because a stronger greenback makes it more expensive for holders of other currencies to buy oil and metals which are dollar-denominated.

March copper fell four cents to US$3.68 an ounce while February crude on the Nymex lost to US$ a barrel.

European bourses were generally weak with London's FTSE index up 0.06 per cent, Frankfurt's DAX lost 0.22 per cent and the Paris CAC 40 was down 0.38 per cent.

Earlier in Asia, Tokyo’s Nikkei 225 jumped 2.8 per cent to its highest closing in 22 months. Much of the enthusiasm for Japanese shares comes from the steadily weakening yen, a big help to Japanese companies that sell abroad.

Elsewhere, however, investor fervour wilted. Hong Kong’s Hang Seng index fell 0.3 per cent, South Korea’s Kospi lost 0.4 per cent while Australia’s S&P/ASX 200 shed 0.4 per cent.

In corporate news, Catalyst Paper Corp. is preparing for a return to the Toronto Stock Exchange next week. The B.C.-based pulp and paper producer, which was delisted from the market last March and completed a court-supervised restructuring in June, says a new class of shares will trade under the symbol CYT starting on Jan. 7.

Enbridge Inc. (TSX:ENB) says it will spend $400 million to expand the capacity of its pipeline system between Hardisty, Alta., and the U.S. border. Enbridge says the project involves increasing pumping horsepower and that no new line pipe construction is involved. It expects to increase capacity by 230,000 barrels a day when the upgrade comes on line in 2015.

Eli Lilly says its 2013 earnings will grow at a pace that tops Wall Street expectations even though the drugmaker will lose U.S. patent protection for two more key products in the new year. The company forecasts adjusted 2013 earnings of between $3.75 and $3.90 per share on $22.6 billion to $23.4 billion in revenue. Analysts expect earnings of $3.72 per share on $22.87 billion in revenue.

Organizations: TSX, Federal Reserve, Statistics Canada Dow Jones Labour Department New York Mercantile Exchange Enbridge Inc. Nymex Australias SP/ASX 200 Catalyst Paper Toronto Stock Exchange Eli Lilly

Geographic location: United States, TORONTO, Canada London Frankfurt Asia Hardisty

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