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TORONTO: Stocks markets continued to sell off Friday morning as fears of a widening sovereign debt crisis in Europe overshadowed strong April job growth in North America that came in far above expectations.

The S&P/TSX composite index fell 160 points to as 11,682.4 after the U.S. Labour Department reported that the economy cranked out 290,000 new jobs last month, far higher than the 180,000 figure that had been expected.

The jobless rate increased to 9.9 per cent from 9.7 per cent.

In Canada, the dollar was well off early highs but still up a fifth of a US cent to 95.23 cents US after Statistics Canada reported that 108,700 jobs were created during April, which goes a long way toward reversing the losses of the 2008-09 recession.

It was also far higher than the 24,000 jobs that economists had forecast for Canada. However, because more Canadians went looking for work in April, the unemployment rate only dropped one-tenth of a point to 8.1 per cent.

TSX commodity stocks suffered as investors continued to buy into the safe haven of the U.S. dollar on fears that the European debt crisis can't be contained within Greece and that countries such as Portugal and Spain will also need massive aid.

But investors also sold bank stocks as worries about tighter credit conditions mount while demand concerns punished transportation stocks.

Oil prices continued to lose ground Friday morning because of the rising dollar and worries about demand prospects with the June crude contract on the New York Mercantile Exchange down $2.09 to US$75.02 a barrel, pushing the energy sector down 2.26 per cent. As of Thursday's close, oil had lost 11.5 per cent from an intraday high of US$87.15 on Monday.

``If the world is a risky place and growth is in question, that hits commodities and that hits Canada hard,'' said Patricia Croft, chief economist, RBC Global Management.

Suncor Energy (TSX:SU) lost 80 cents to $31.57 and Canadian Natural Resources (TSX:CNQ) fell $1.55 to $71.15.

Other commodity prices were mixed with June gold ahead $1.10 at US$1,198.40 but the TSX global gold index fell 3.43 per cent. Barrick Gold Corp. (TSX:ABX) was down 92 cents to $45.20 while Kinross Gold (TSX:K) faded 49 cents to $18.26.

The base metals sector was off 1.17 per cent with July copper unchanged at US$3.12 a pound. Teck Resources (TSX:TCK.B) declined 43 cents to $36.25.

The industrials sector backed off 1.35 per cent with Canadian National Railways (TSX:CNR) down 82 cents to $58.28 and Canadian Pacific (TSX:CP) slipped 95 cents to $56.38.

The financial sector gave back one per cent as TD Bank (TSX:TD) lost 65 cents to $71.660.

Fears that Europe's debt crisis could spread and dim prospects for a global economic recovery pushed the TSX down 33 points on Thursday while the Dow tumbled 348 points during a session that saw massive swings.

The TSX fell about 420 points at mid-afternoon while the Dow plunged almost 1,000 points. That huge drop was blamed in part on a trading error and regulators said they were reviewing what had happened.

Germany's parliament approved Berlin's share of the rescue package after a boisterous debate. However investors still fear that Greece may not make a May 19 deadline to make a debt repayment.

Investors' concern goes far beyond the debt problems in Greece, the smallest economy in the European Union. A further loss of confidence in European government debt could have an impact on other weak countries like Portugal, potentially requiring another difficult bailout process. The debt crisis has already badly undermined Europe's shared currency, the euro.

Selling pressure on the euro abated slightly with the currency trading around US$1.2628, up from US$1.2611 late Thursday.

Four straight days of losses have left the TSX down about four per cent for the week, leaving the main index lower than where it stated the year.

On Friday, the TSX Venture Exchange dropped 22.86 points to 1,539.82.

The Dow industrials, down almost 250 points earlier in the morning, was off 42.5 points at 10,477.8 despite the employment report.

The Nasdaq composite index was 21.5 points lower to 2,298.14 while the S&P 500 index lost 4.2 points to 1,123.95.

In corporate news, GMP Capital Inc. (TSX:GMP) said it had a $62.4-million net loss in the first quarter as it wrote down the value of its EdgeStone business unit. Without the $80.5-million in charges related to EdgeStone, GMP's adjusted net income was $13.6 million. Its shares were off 16 cents to $11.67.

Enerplus Resources Fund (TSX:ERF, NYSE:ERF), a Calgary based oil and gas producer, reports its net profits for the first quarter surged to more than $80 million from $51.8 million even as the company generated lower production. Its units added 25 cents to $23.13.

In Britain, where investors were grappling with uncertain general election results, the FTSE 100 index was down 3.56 per cent.

Germany's DAX fell 3.59 per cent while the CAC-40 in France was 0.81 per cent lower.

The showing in Europe followed big declines in Asia _ Japan's benchmark Nikkei index closed 3.1 per cent lower.

China's Shanghai Composite Index closed 1.9 per cent lower while Hong Kong's Hang Seng index ended around 1.1 per cent down.