TORONTO - The Toronto stock market continued to bounce between positive and negative territory Friday afternoon as investors weighed higher commodity prices against mixed North American employment data and traders sold off shares of the market's most influential stock.

The S&P/TSX composite index was down 3.7 points at 13,159.8 after logging two straight days of new post-recession highs. The TSX Venture Exchange was up 7.56 points at 2,103.3.

The Canadian dollar moved 0.12 of a cent lower to 99.49 cents US, even as the U.S. dollar dropped 0.9 per cent against an index of six currencies.

The loonie lost ground after the release of mixed Canadian employment data that showed that the jobless rate dropped to 7.6 per cent per cent in November, despite the economy creating only 15,200 new net jobs -- all part time. It fell even further after the U.S. reported its unemployment rate climbed last month.

Still, investors seemed to focus on the fact that more Canadians are working, suggested Craig Wright, chief economist at RBC Financial Group.

"Depending how people read the headlines, I think the big drop in the unemployment rate could actually give consumer confidence a lift," he said.

The financial sector fell 1.3 per cent as Royal Bank of Canada (TSX:RY), which has the highest market capitalization of any Canadian company on the TSX, saw its share price drop five per cent in heavy trading after it reported fourth-quarter profits slipped nine per cent to $1.12 billion, missing analyst expectations on a cash per share basis.

Shares in Canada's biggest bank were down $2.55 to $53.07 with over 8.6 million changing hands.

Of the big six Canadian banks, only Scotiabank (TSX:BNS), up $1.30 to $55, and National Bank (TSX:NA), up nine cents to $69.45, made gains.

Scotia reported a 21 per cent jump in profits Friday, beating analyst estimates, while National announced earlier this week it would become the first big bank to increase its dividend since the recession.

The telecommunications, industrial and utilities sectors were also among the sectors that were in the red.

But steady gains among gold and base metals miners kept the selling spree at bay. Both sectors rose about two per cent as traders ramped up investments in alternatives to the U.S. dollar.

The February gold contract was up $18.60 to US$1,407.90 an ounce, while the March copper contract on the Nymex was unchanged at US$3.99.

Shares in Barrick Gold Corp. (TSX:ABX) gained $1.24 cents to $54.80 while shares in diversified miner Teck Resources (TSX:TCK.B) added 88 cents to $54.90.

The January crude contract gained 30 cents to US$88.30 a barrel on the New York Mercantile Exchange, but the TSX energy sector was down 0.1 per cent. Canadian Natural Resources (TSX:CNQ) added 21 cents to $41.97.

Wall Street was also relatively flat with the Dow Jones industrial average down 20.2 points at 11,342.2, the Nasdaq composite index added 4.73 points to 2,584.3, while the S&P 500 index fell 2.15 points to 1,219.46.

A jobs report released early Friday showed the U.S. unemployment rate climbed to a seven-month high of 9.8 per cent in November as hiring slowed, suggesting continued weakness in the American economy.

Economists had expected a modest gain in employment of 145,000 new jobs, but employers added only 39,000 jobs last month.

Canada's jobless rate is the lowest it's been in almost two years. But the underlying story in the Statistics Canada report is one of overall weakness as most of the decline in the unemployment rate is due to 43,600 Canadians leaving the labour market. And the majority of jobs added were part-time.

But Emanuella Enanajor, CIBC World Markets Inc. said: "Half a job is better than no job at all, so November still marked an improvement in labour market conditions in Canada."

On the TSX, Western Coal Corp. (SX:WTN) was the Toronto stock market's most active issue at midafternoon after it announced it had agreed to be taken over in a deal that values the Vancouver-based miner at $3.3 billion. Its shares jumped 11.5 per cent, or $1.20, to $11.50 with over 55 million changing hands.

Vector Aerospace Corp. (TSX:RNO) stock soared about 23 per cent after the Canadian aviation repair and overhaul company said it had received "preliminary expressions of interest" from a number of interested parties. Shares added $1.62 to $8.45.

Meanwhile, units in Canadian Oil Sands Trust (TSX:COS.UN) plummeted nearly 11 per cent in afternoon trading Friday after the company announced it will pay a dividend of 20 cents once converts to a corporation -- down 60 per cent from its current payout. Units fell $3.17 to $25.24.

Cheese maker Saputo (TSX:SAP) shares fell 64 cents to $36.99 after announcing it had expanded a recall of all cheese made on a single line at an unnamed Quebec facility to contain a possible Listeria bacteria contamination.