TORONTO - News that the U.S. unemployment rate fell for the first time in 15 months propelled the Toronto stock market to a strong gain Friday, despite worse-than-expected jobs data for Canada.

The S&P/TSX composite index added 91.96 points to 10,885.33 on a report that U.S. employers sharply scaled back layoffs in July while the unemployment rate fell one-tenth of a percentage point to 9.4 per cent.

Toronto's main index was up 98 points or 0.9 per cent on the week, its fourth consecutive week of gains in a row.

A net total of 247,000 jobs were lost in the United States last month, the fewest in a year and a sign that "the worst may be behind us" according to U.S. President Barack Obama. Analysts had forecast job losses of 320,000.

North of the border, Canada's labour market shed another 45,000 jobs in July, almost triple the rate expected by analysts, although the national unemployment rate stayed steady at 8.6 per cent as more people stopped looking for work.

Full-time employment and private sector jobs -- the two most reliable indicators of labour market strength -- both continued their downward trajectory.

The weak Canadian jobs data helped send the loonie tumbling 0.48 cent to 92.40 cents US.

Fred Ketchen, manager of equity trading at Scotia Capital, said the disappointing Canadian jobless numbers were somewhat offset by the unchanged unemployment rate.

"Sure, we lost 44,000 jobs, three times the forecast. However, our unemployment rate is unchanged at 8.6 per cent," Ketchen said.

"There are still... economists forecasting that the jobless rate in Canada could climb as high as 10 per cent. So the fact that we're not there yet and we've still got a fair ways to go to get there, I think that ought to be a positive."

Oil prices were lower, with the September crude contract on the New York Mercantile Exchange losing $1.01 to US$70.93. The Toronto energy sector fell 0.1 per cent.

The gold sector 1.7 slipped per cent as the December bullion contract lost $3.40 to US$959.50.

The financial sector regained 1.8 per cent after plunging 5.6 per cent Thursday on news that Canada's largest insurance company, Manulife Financial Corp.(TSX:MFC), cut its dividend in half.

Shares in CIBC (TSX:CM) jumped $2.75 or 4.2 per cent to $68.75 on the strength of the sector.

The TSX Venture Exchange added 4.46 points to 1,192.58.

In New York, all the major indexes surged by more than one per cent on hopes that the better-than-expected unemployment rate is a sign that the economic recovery is already well underway.

The Nasdaq composite index added 27.09 points to 2,000.25, while the Dow Jones industrial average gained 113.81 points to 9,370.07.

The S&P 500 increased 13.40 points to 1,010.48.

It was another heavy earnings day on Bay Street, with several major companies from a variety of sectors reporting.

Telus Corp. (TSX:T) said the effects of the recession continued to bite into its earnings, with profits down nine per cent and revenues stalled with little growth. Shares in the telecommunications company gained $1.87 or 6.1 per cent to $32.63.

Investment giant Brookfield Asset Management Inc. (TSX:BAM.A) says its profits in the second quarter increased by 33 per cent from a year ago on the strength of its office property portfolio even as revenue declined. Brookfield's shares added 12 cents to $21.86.

Meanwhile, Magna International Inc., (TSX:MG.A), the Canadian auto parts giant that's bidding for General Motors' European Opel business, said it lost US$205 million in the quarter, reversing a year-earlier profit as the global recession depressed demand for its products.

Magna's shares added $1.92 or 3.7 per cent to $53.30.

Air Canada (TSX:AC.B) said foreign exchange gains led to a 27 per cent increase in profits for the airline despite a decline in passenger traffic and revenues. Air Canada shares lost three cents to $1.85.