A weak U.S. payrolls report sent stocks tumbling on Friday as investors recoiled from the latest sign that the U.S. economic recovery is deteriorating.
The Dow Jones industrial average closed at 12,772.47, down 124.20 points or 1 per cent. The broader S&P 500 closed at 1,354.68, down 12.90 points or 0.9 per cent.
In Canada, the S&P/TSX composite index closed at 11,659.65, down 157.38 points or 1.3 per cent.
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The declines mark the biggest setbacks for major indexes in about two weeks and come shortly after Canada's benchmark index enjoyed a remarkable six-day winning streak, which ended on Thursday.
The U.S. Labor Department reported that employers added 80,000 jobs last month, missing expectations and conforming to what has been a brutal stretch for the much-anticipated employment report.
Economists pointed out that last month's gains are too slight to make any impression on the unemployment rate, which held steady at 8.2 per cent.
The report also fits in with a steady stream of economic disappointments.
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In the U.S. alone, recent reports have shown that manufacturing activity has contracted and activity in the services sector has slowed down more than expected, raising alarms about the health of the economy.
Elsewhere, economic news has been similarly disappointing. On Thursday, central banks from the U.K., the euro zone and China introduced stimulus measures in an effort to boost growth.
This apparently co-ordinated response, along with the increasing belief that the Federal Reserve will soon respond with a stimulus measure of its own, has given investors little relief.
Christine Lagarde, managing director of the International Monetary Fund, said on Friday that the IMF will reduce its outlook for global growth this year.
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Currently, the forecasts stands at a tepid 3.5 per cent.
In Europe, stocks also moved lower. The U.K.'s FTSE 100 fell 0.5 per cent and Germany's DAX index fell 1.9 per cent.
Bond yields for countries that are viewed as higher risk moved higher, raising their borrowing costs and underlining the concern that the sovereign-debt crisis remains a threat.
The yield on Spain's 10-year government bond approached 6.9 per cent, up about 17 basis points. The yield on Italy's 10-year government bond rose to 6 per cent, up 4 basis points.
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In Canada, commodity producers took the biggest tumbles, following key commodity prices. Crude oil fell to $84.12 (U.S.) a barrel, down $3.10.
Gold fell to $1,578.90 an ounce, down $30.50. Suncor Energy Inc. fell 3.4 per cent and Barrick Gold Corp. fell 2.7 per cent.
Research In Motion Ltd. rose 5.3 per cent, marking its second big move in as many days – possible over speculation that the struggling BlackBerry maker could be a takeover target after Bloomberg News reported that Amazon.com Inc. is developing a smartphone.