Investors took in numbers that showed continued job creation during April.

However, high crude prices along with a huge quarterly loss at AIG depressed New York markets.

Toronto's S&P/TSX composite index moved down 28.62 points to 14,579.37 after Thursday's 236-point oil-driven surge took the main Toronto index within less than 20 points of its record closing high from last July.

The commodities sector has been the star performer as financial stocks have been hobbled by a lengthy series of huge writedowns of securities connected to the U.S. housing sector.

"I would like to see the financials a little stronger but I think that both energy and materials are reacting appropriately to the prices of their underlying commodity," said Blair Falconer, portfolio manager at HSBC Securities.

"With the Canadian market, you keep having to circle back. If you're going to get new records, you're going to get them because of those (energy and materials) much more than from the financials or anything else. I would like to see some broader participation, sure - but that's not going to take us to records."

The TSX Venture Exchange added 8.25 points to 2,547.7 while the Canadian dollar moved up 1.12 cents to 99.44 cents US after Statistics Canada reported the economy cranked out more than 19,000 jobs last month. The national jobless rate edged up 0.1 percentage point to 6.1 per cent, but this was because more people entered the labour force.

The agency also reported that Canada's merchandise trade surplus with the world jumped to $5.5 billion in March, its highest level since May of last year.

The American trade deficit, meanwhile, narrowed sharply in March, down 5.6 per cent to US$58.2 billion as imports fell by the largest amount since the last recession was ending.

New York's Dow Jones industrial average fell 104.13 points to 12,762.65 after AIG posted a first-quarter loss of US$7.81 billion and revealed plans to raise US$12.5 billion in new capital. Its shares fell $3.10 to US$41.05 as the news increased anxiety about the financial sector in general.

The Nasdaq composite index lost 4.10 points to 2,447.14 and the S&P 500 index shed 9.22 points to 1,388.46.

Elsewhere in the U.S. financial sector, Citigroup Inc. said it is aiming for nine per cent revenue growth as it looks to rebound from recent struggles tied to deterioration in the mortgage and credit markets. Citigroup generated $13.22 billion in revenue during the first quarter, 48 per cent less than a year earlier. Its shares added four cents to US$24.34.

On the TSX, the financial sector recovered from early losses in the wake of the AIG news, rising almost one per cent. Manulife Financial (TSX:MFC) recovered somewhat from Thursday's drubbing in the wake of lower first quarter profits, rising 71 cents to $37.61 after losing almost $2 in the prior session.

Scotiabank (TSX:BNS) rose 77 cents to $48.95.

The TSX energy sector dipped 0.3 per cent although the June crude contract on the New York Mercantile Exchange rose $1.12 to US$124.81 a barrel after going as high as US$126.20. EnCana (TSX:ECA) fell $1.48 to $86.

Canadian Natural Resources Ltd. (TSX:CNQ) was ahead 71 to $96.71 after reporting quarterly earnings of $727 million as net revenue soared to just under $4 billion from $3.1 billion.

Gold prices lost early momentum as the June bullion contract on the Nymex declined $6.20 to US$875.90 an ounce, taking the TSX gold sector down 2.4 per cent. Barrick Gold (TSX:ABX) gave back $1.20 to $39.80.

The base metals sector was also lower, down 1.5 per cent as Teck Cominco Ltd. (TSX:TCK.B) fell $1.21 to $47.91.

In political business news, the federal government confirmed its decision to block a controversial American takeover of part of Canada's premier space technology firm. Industry Minister Jim Prentice said he remains unconvinced that the proposed $1.3-billion acquisition by Alliant Techsystems Inc. of the MacDonald Dettwiler satellite systems business would benefit Canada. The government also announced a four-year, $109-million contract extension for the company, which will see MDA continue to provide logistics and engineering and technology services for the International Space Station. MDA shares declined 77 cents to $40.84.

Fording Canadian Coal Trust (TSX:FDG.UN, TSX:TCK.B) said its average price for the 2008 coal year is expected to nearly triple. Its units headed 73 cents higher to $71.65.

Manitoba Telecom Services Inc. (TSX:MBT) MTS said its January-March net income was $54.2 million, compared with $52.9 million a year ago. Revenue rose to $478.8 million from $466.6 million and its shares rose 42 cents to $41.19.

The Aeroplan Income Fund (TSX:AER) announced plans to reorganize from an income trust into a "growth-oriented, dividend-paying global loyalty management public corporation." Its units rose 35 cents to $16.65.

Equity markets abroad made a wide retreat as the ongoing rise in oil prices stoked inflation anxiety.

Chinese stocks fell after the government reported the country's producer price index rose 8.1 per cent in April over a year earlier. The Shanghai composite Index fell 1.2 per cent, shedding 43.35 points to 3,613.49.

Hong Kong's key stock index dropped for a third straight session, with the Hang Seng dropping 386.62 points, or 1.5 per cent, to 25,063.17.

Japan's Nikkei 225 index sank 287.92 points, or 2.1 per cent, to 13,655.34.

London's FTSE 100 index was down 55.9 points to 6,214.9, while the German DAX faded 63.59 points to 7,008.31 and the Paris CAC-40 dropped 96.73 to 4,958.85.