Data showing the U.S. job market screeched to a halt in August sent Bay Street and Wall Street into a sea of red on Friday.
The S&P/TSX Composite Index lost 198 points to trade at 12,602 when trading closed for the week. Losses in New York were even worse, with the Dow Jones Industrial Average down 253 points to 11,240.
Oil lost more than $2 to trade below $87. It had earlier been down by more than $3.
Oil was down despite the approach of Tropical Storm Lee, which has cut off just under half of the normal oil production from the Gulf of Mexico's U.S. waters.
The catalyst for all the gloom was U.S. data showing that effectively, the U.S. economy created no new jobs last month.
"The stagnation in U.S. payroll employment is an ominous sign," said Paul Ashworth, chief U.S. economist at Capital Markets.
"The broad message is that even if the U.S. economy doesn't start to contract again, any expansion is going to be very, very modest and fall well short of what would be needed to drive the still elevated unemployment rate lower."
It's the first time since February 1945 that the U.S. government has reported a net job change of zero. The unemployment rate stayed at 9.1 per cent.
The Canadian dollar was off almost a cent, down 0.92 of a cent to 101.54 cents US when stock markets closed.
Earlier, Japan's Nikkei 225 index fell 1.2 per cent, Hong Kong's Hang Seng index declined 1.8 per cent and South Korea's Kospi shed 0.7 per cent.
European indexes also worsened after the release of the U.S. jobs report as London's FTSE 100 index lost 2.58 per cent, Frankfurt's DAX was down 3.84 per cent and the Paris CAC 40 shed 3.74 per cent.
Gold, which tends to rise during periods of pessimism, gained $55 to $1,885 an ounce.