Oil weighs on TSX

Bay Street stocks moved to a weekly low on Thursday, led by significant weakness in the energy sector. Stocks suffered a second straight negative close after five straight gains.

The S&P/TSX Composite Index declined 129 points, or 1.2%, to end Thursday's trading at 10,245.91. The index followed the lead of U.S. and European stocks.

Energy stocks plummeted, as Suncor declined 6.3% to $33.16, Canadian Natural Resources dropped 4.2% to $58.60, Canadian Oil Sands was down 4.5% to $26.55 and Encana slid 2.6% to $56.19.

On the other hand, Gastar Exploration soared nearly 47% to 66 cents a share, after the oil and gas explorer announced Thursday that it has agreed to sell its entire interest in petroleum exploration licenses in New South Wales, Australia and the shares of Gastar Power Pty to affiliates of Santos for an aggregate amount of $240 million U.S.

Materials stocks are showing a gain, led by a 2.5% spike by Potash to $111.18. Rival Agrium added 1% to $46.90. Mining stocks were up, as First Quantum added 3.1% to $57.98.

In other corporate news, Canadian National Railway dropped 2.7% to $48.60 after the stock was downgraded to Market Perform from Outperform by Raymond James.

Research in Motion dropped 1.8% to $81.61. The Blackberry maker's stock was initiated at Outperform with a target price of $100 at BMO Capital.

EXFO Electro-Optical was down 7.6% to $3.42 despite being upgraded to Overweight from Market Weight with a price target of $4 by Thomas Weisel.

Bombardier has dropped 2.6% to $3.36 after the company said Tuesday after the close that it has signed a contract with the Toronto Transit Commission for the supply of 100% low-floor streetcars - 204 in all - to replace the City of Toronto's aging fleet of vehicles.

CanWest Global Communications has declined 3.2% to 15 cents. The company agreed to sell two small television stations in Montreal and Hamilton in a deal that is believed to be worth less than $5,000, according to the Globe and Mail.

Paramount Gold and Silver Corp. announced a property option amendment agreement of its Morelos Project situated in the State of Chihuahua, Mexico. Shares were down 3.5% to $1.67.

The Canadian dollar was down 0.96 cents to 86.04 cents U.S.

ON BAYSTREET

Of the 14 TSX subgroups, nine ended the day down. Energy stocks were the worst off, dropping 3.9%, while real-estate issues surrendered 1.8% and global base metals were off 1.7%.

The gaining groups were lifted higher by materials, which picked up 1.7%, metals and mining, which strengthened 1.5% and gold, which advanced 0.8%.

The TSX Venture Exchange regained 0.61 points, to 1,092.58, while the Nasdaq Canada Index let go of 3.91 points to 680.13

ON WALLSTREET

In New York, Stocks tumbled Thursday, after a worse-than-expected jobs report hammered hopes that the economy is close to stabilizing.

The Dow Jones Industrials average tumbled 220.60, or 2.6%, to end a short week at 8,283.46. The S&P 500 index faltered 26.66 points to 896.67. The Nasdaq gave back 49.20 points to 1,796.52.

The closing bell was delayed 15 minutes so as to allow customers to put through orders that were impacted by system irregularities. The NYSE did not specify what the irregularities were.

In the April-through-June period, the S&P 500 gained 15.2%, its best quarter in more than a decade. The Dow rose 11% and the Nasdaq 20%. Both indexes posted their best quarters since the second of 2003. Stocks rallied on hopes that the economy was starting to stabilize after the six months of panic that followed the collapse of Lehman Brothers last September.

But lately, stocks have churned on concerns that the market got ahead of itself.

Declines were broad based, with all 30 Dow stocks falling, led by oil components Chevron and Exxon Mobil. IBM, Boeing, United Technologies and Wal-Mart were the other big losers.

Financial shares tumbled, including Dow components American Express, JPMorgan Chase and Travelers Companies.

In deal news, Exelon has sweetened its hostile takeover offer for rival power generator NRG Energy. The all-stock offer is $8 billion U.S. versus the previous offer of $7 billion U.S.

Johnson & Johnson will take an 18% equity stake in biotech Elan in exchange for a $1-billion U.S. investment. J&J will also buy Elan's share of its Alzheimer's disease treatment program with Wyeth.

U.S.-traded shares of Elan gained 11% in active New York Stock Exchange trading.

The June employment report from the Labor Department showed a net loss of 467,000 jobs in June, compared with 322,000 in May. That's the first time in four months that the number of jobs lost rose from the prior month, and the cuts were far worse than the forecast of 365,000.

The unemployment rate, generated by a separate survey Thursday, rose for the ninth straight month, climbing to 9.5% from 9.4%. Economists expected the rate to hit 9.6%.

Elsewhere on the economic calendar, May factory orders rose 1.2%, the Commerce Department reported, versus forecasts for a rise of 0.9%. Factory orders rose a revised 0.5% in April.

All financial markets are closed Friday for the Independence Day holiday.

Treasury prices climbed, forcing the yield on the benchmark 10-year note down to 3.50%. Treasury prices and yields move in opposite directions.

Oil prices shed $2.58 a barrel to $66.66 U.S.

Gold prices subsided $10 an ounce at $931 U.S.