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Premarket: Market shudders on feeble U.S. job growth

A view of employees working at the General Motors assembly plant in Wentzville, Missouri in this February 7, 2012 file photo.


The Toronto stock market headed for a weak open Friday amid a sharp slide in oil prices and worries that the global economy is slowing faster than previously thought.

U.S. stock index futures were little changed on Friday ahead of the report that U.S. employers hired at a dismal pace in June.

The Labor Department said on Friday non-farm payrolls expanded by just 80,000 jobs in June, falling short of forecasts though a tad higher than a revised May reading of 77,000.

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Job creation during the month wasn't enough to bring down the country's lofty 8.2 per cent unemployment rate. The report appeared sure to fuel concerns that Europe's debt crisis is shifting the U.S. economy into low gear.

Canadian employment increased by a net 7,300 positions in June and the jobless rate fell unexpectedly to 7.2 per cent, Statistics Canada said Friday in Ottawa.

After the S&P 500 index's strongest three-day run this year, investors stepped back on Thursday, leaving the broad index and the Dow modestly lower. The Dow Jones industrial average fell 0.4 percent, the Standard & Poor's 500 Index dropped 0.5 percent and the Nasdaq Composite Index ended flat.

The TSX fell just shy of 100 points Thursday after data showed the U.S. service sector moved closer to contraction last month. Another report showed larger retailers missing expectations last month. The drop snapped a six session positive run that saw the TSX jump more than five per cent.

European bourses were listless Friday with London's FTSE 100 index unchanged, Frankfurt's DAX lost 0.36 per cent and the Paris CAC 40 backed off 0.44 per cent.

The Canadian dollar opened at 98.47 cents US, down 0.11 of a cent from Thursday's close.

The euro was worth $1.2568, up 0.03 of a cent.

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Policy loosening by a trio of major central banks failed to impress investors on Friday, pushing Spanish borrowing costs back up to unsustainable levels reached before last week's EU summit took measures designed to ease pressure on them.

China, the euro zone and Britain all loosened monetary policy on Thursday, signalling growing alarm about the world economy. But to little avail.

The euro stayed close to a five-week low against the U.S. dollar after an interest rate cut by the European Central Bank further dampened the common currency's appeal, while Brent crude oil shed more than a dollar to drop below $100 a barrel.

The head of the International Monetary Fund, Christine Lagarde, expressed concern Friday about the outlook for the global economy, which has become more worrying as developed and big emerging nations show signs of slowing growth.

In corporate news, Pengrowth Energy Corp. is reducing its monthly dividend payments to shareholders by 43 per cent to four cents a share starting next month. The Calgary-based company says it's making the change due to weak commodity prices and increased uncertainty in the capital and property markets.

Canadian Pacific Railway says Tony Ingram has resigned as a director, the third departure from the CP board since the Calgary-based company's annual meeting in May. As a result of the departures and the addition of Hunter Harrison as director and chief executive officer of the company, the nominees put forward by Pershing Square have a majority on the 14-member board of directors.

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Skyrocketing sales of the Galaxy smartphone drove a record quarterly profit of $5.9 billion at Samsung Electronics . This is likely to stretch the firm's lead over rivals Apple and Nokia.

Gold prices edged down on Friday as a stronger dollar hurt European appetite for the metal and as investors waited for U.S. jobs data to help gauge the health of the world's top economy.

With files from Angela Moon of Reuters and Malcolm Morrison of The Canadian Press

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