The Toronto stock market tumbled again Friday, a day after investors punished stocks and sparked the worst one-day decline in two years, with no comfort coming from a stronger-than-expected reading on U.S. employment.

The S&P/TSX composite index fell 216.03 points or 1.74 per cent to 12,164.1, led by sliding resource stocks as investors feel slowing economic conditions will heavily impact demand.

"Investors are still a bit concerned about the slowdown in global growth and the worries that Europe may not get its arms around what looks like continuing problem with the size of debt," said Kate Warne, Canadian markets specialist at Edward Jones in St. Louis.

"As a result we're seeing declines in resource prices and particularly resource stocks which are very heavy in the TSX."

The junior TSX Venture Exchange was off 36.8 points to 1,816.53.

It had been hoped that a decent jobs number from the U.S. would lessen anxiety about the state of the influential American economy.

But the announcement that 117,000 were created in July was simply not enough to brighten investors' mood, said Andrew Pyle, investment adviser with ScotiaMcLeod in Peterborough, Ont.

"These aren't great numbers, right?," Pyle said.

"They're not amazing numbers, not amazing headlines -- when was the last time we got excited over 117,000 increase in jobs?"

Meanwhile, stock market operator TMX Group said it was investigating an early problem with index data -- there was an initial positive reading shortly after the market open, which stayed unchanged for the next 10 minutes.

The U.S. Labour Department's non-farm payrolls report Friday said employment rose by 117,000 in July, higher than the approximately 80,000 jobs that economists expected. Also, the jobless rate edged down 0.1 per cent to 9.1 per cent.

There was more good news: the data also showed that the economy created 56,000 jobs more than originally thought.

The data came out a day after pessimism over the U.S. economy and the big debt problems facing eurozone countries such as Spain and Italy pushed the TSX down 436 points.

The Canadian dollar was down 0.27 of a cent to 101.82 cents US as traders also took in data showing that Canadian job growth for July came in at 7,100, less than half what economists expected.

However, analysts pointed out that the details of the report were more encouraging.

"Full-time jobs rose 25,500 and private sector employment rocketed a massive 94,500, more than offsetting a big drop in public sector jobs," observed BMO Capital Markets deputy chief economist Doug Porter.

Also, the jobless rate declined 0.2 of a per cent to 7.2 per cent, the lowest since the end of 2008 and down from eight per cent a year ago.

Magna International Inc. (TSX: MG) was an early big loser, as its shares fell $6.90 or 15.7 per cent to $37.07 after it reported net income of $282 million in the second quarter, or $1.15 per share -- far below the $1.32 a share that analysts expected.

Oil prices turned around following the U.S. jobs report after slumping this week because traders feel that slowing economic conditions will crimp demand.

The energy sector fell 2.47 per cent as the September oil contract on the New York Mercantile Exchange lost 52 cents to US$86.11 after plunging more than $5 Thursday. Suncor Energy (TSX:SU) declined $1.12 to C$32 and Canadian Natural Resources (TSX:CNQ) was down 90 cents to C$35.29.

The mining sector lost 2.73 per cent as the September copper contract fell seven cents to US$4.17 a pound. Teck Resources (TSX:TCK.B) lost 53 cents to $42.87 while Lundin Mining (TSX:LUN) fell 20 cents to $5.47.

Traders looking for safety pushed the December gold contract up $7.20 to US$1,666.20 an ounce, leaving the gold index slightly lower. Barrick Gold Corp. (TSX:ABX) rose 12 cents to $45.50 and Goldcorp Inc. (TSX:G) gained 57 cents to $45.45.

Financials were also a drag with Royal Bank (TSX:RY) down 52 cents to $50.21.

New York markets had initially greeted the job numbers enthusiastically, with the Dow Jones industrial average up as much as 171 points following a 513-point tumble on Thursday. But by late morning, the blue chip index was down 79.73 points to 11,303.95.

The Nasdaq composite index lost 34.79 points to 2,521.6 while the S&P 500 index declined 10.77 points to 1,189.3.

In earnings news, shares in Telus Corp. (TSX:T), Canada's second biggest telecom operator, were off $1.02 to $50.26 after it raised its revenue guidance and boosted its dividend Friday. It also reported net profits in the second quarter rose to $324 million or 99 cents a share from $302 million or 94 cents a year ago.

Enbridge Inc. (TSX:ENB), a major oil pipeline operator and natural gas distributor, reported its net earnings in the second quarter nearly doubled to $259 million or 35 cents a share. Its shares dipped 16 cents to $30.03.

Investors continued to sell on foreign markets Friday as Japan's Nikkei 225 stock average slid 3.7 per cent, Hong Kong's Hang Seng dived 4.3 per cent while China's Shanghai Composite Index lost 2.2 per cent.

European bourses were mainly lower as leaders face the prospect that Italy and Spain won't be able to hold out until a new, strengthened bailout fund is in place to prop them up.

Italian and Spanish bonds traded at levels that threaten those countries ability to raise money in the bond markets to pay off debts.

London's FTSE 100 index dropped 2.01 per cent, Frankfurt's DAX lost 1.78 per cent while the Paris CAC 40 was down 0.9 per cent.