Volatility continued this week in the major North American markets, with the main Canadian index making a small rally at the end of the day that offset some earlier losses.

Fears of a recession in the U.S. and concern over the brewing European banking crisis battered commodities in Canada, pushing the Toronto Stock Exchange and the Canadian dollar lower.

The TSX lost 99.65 points to end the day at 11,462.87. While still showing signs of uncertainty, the TSX had earlier been down 150.43 points.

A slump in commodity prices was the main culprit, pushing the index 20 per cent below levels in early March. This week alone, the TSX is down nearly 7.5 per cent.

The loonie, meanwhile, closed below parity, ending the week at $97.14 cents US. The result was 0.19 cents lower than Thursday's close.

Gold and oil were also victims of pessimism, with each commodity dropping 10 per cent this week. Copper also dropped 16 per cent.

However, in the U.S., sell-off pressures eased.

The Dow gained 37.65 points to 10,771.48 after losing 700 points earlier in the week. The Nasdaq, meanwhile, gained 27.56 points to end the session at 2,483.23.

The S&P 500 was up 6.87 points to 1,136.43.

Craig Alexander, TD Bank Financial Group chief economist, said that volatility will continue in Canada and elsewhere as uncertainty remains in the global economy.

Alexander told CTV News Channel from Ottawa that Canada is a "small trading country" that isn't protected from global trends, and that things will have to improve elsewhere before Canada sees stability.

He also said that the Canadian dollar could remain under par as investors flock to the relative security of the U.S. greenback.

With fears of a banking crisis in Europe and the U.S. economy remaining fragile, things may not get better for a while.

"That's why we need to see progress in those areas. Even though Canada does have very strong fundamentals, we are impacted by what happens abroad," Alexander said.

The market volatility has many concerned that a second recession is on the way, only two years after the last downturn.

But with record levels of debt, Canadians may be less able to weather an economic storm this time around.

The recession in 2008-2009 resulted in 300,000 jobs being eliminated from the economy. It also had dire effects on Ontario's long-battered manufacturing sector, including the automotive industry.

"Canadians are more vulnerable going into this recession than going into the (last) recession because we didn't have as much debt at that time," said Danielle Park of Venable Park Investment Counsel Inc.

This year, the ratio of household debt-to-income has swollen to 150 per cent as consumers rely on credit to pay for their lifestyles.

On average, for every dollar that Canadians earn, they owe $1.50 to lending agencies like banks and credit card companies.

"It's like you've had pneumonia and now you get a cold. Your immune system is so vulnerable that when the recession hits, it hits you extra hard and consumers that can't afford to miss a week of work start getting laid off," Park told The Canadian Press.