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A man takes a nozzle at a gas station on Dec. 26, 2014 in Marseille, southeastern France. Oil prices have fallen about 50 per cent since June on mounting supplies due to increased production and lackluster global economic growth.

BORIS HORVAT/AFP / Getty Images

The Toronto stock market was sharply lower Monday as oil prices slid to a fresh 5-1/2-year low, dropping below $50 a barrel for the first time since April, 2009, just before noon. It then recovered, creeping back above the $50 mark.

The S&P/TSX composite index lost 400.5 points, or 2.71 per cent, to 14,353.19 as of 12:41 p.m. ET. The Canadian dollar was also at a 5-1/2-year low, down to 84.79 cents (U.S.).

The energy sector dropped more than 2 per cent while West Texas Intermediate slid $2.39 to $50.30 a barrel.

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U.S. indexes were deep in the red at the start of a busy week for economic data, capped on Friday by the release of the U.S. government's employment report for December.

The Dow Jones industrials dropped 134.31 points to 17,698.58, the Nasdaq shed 24.86 points to 4,701.95 while the S&P 500 index was 15.58 points lower to 2,042.62.

Commodity prices were also depressed as the U.S. currency strengthened and the euro fell to the lowest level since March, 2006, amid fresh doubts as to Greece will exit the euro zone following elections later this month.

The greenback strengthened as traders weigh the outcome of upcoming elections in Greece that might be won by the anti-austerity Syriza party. Such a victory would raise doubts about whether the country will stick to the terms of its international bailout and stay in the euro bloc. Germany has warned Greece against reneging on the bailout conditions should Syriza win this month's general election.

Greek jitters helped push the euro down as low as $1.1864 (U.S.) earlier Monday morning.

Elsewhere on the TSX, the base metals sector was down 2 per cent while March copper fell five cents to $2.77 a pound.

Most sectors were lower with financials down 1 per cent and industrials fell 1.2 per cent.

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The gold sector was the leading advancer, up 1.75 per cent as February bullion added $7.90 to $1,194.10 an ounce.

On the U.S. economic calendar for this week, investors looked to the latest reports on auto sales during the day.

Later in the week, they will digest the minutes from last month's Federal Reserve meeting for indications of when the central bank might move to hike rates later this year.

Markets will also take in Canadian data including merchandise trade, housing starts and building permits.

But it is the latest readings on employment that will focus markets.

Economists expect that the American economy created about 240,000 jobs during December and that the jobless rate ticked slightly lower.

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In Canada, it is expected Statistics Canada will report that the economy cranked out about 10,000 jobs, after losing a similar amount during November.

Traders also digested acquisition developments in the tech and energy sectors.

NeuLion, Inc. has an agreement to acquire DivX LLC with a combination of shares and debt valued at $62.5-million (U.S.). The deal will combine two technology companies focused on delivering video content to Internet-enabled devices such as computers, smartphones and tablets. Neulion rose 13 cents to $1.47 (Canadian).

Energy Fuels Inc. and Uranerz Energy Corp will combine their businesses in an all-stock deal valued at about $150-million (U.S.) that will create one of the largest uranium companies in the U.S. Energy fuels declined 33 cents to $6.99 while Uranerz ran ahead 16 cents to $1.49 (Canadian).

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