(Updates to mid morning)
* TSX up 27.39 points, or 0.22 pct, at 12,475.07
* Financials rally, energy and gold shares lag
By Claire Sibonney
TORONTO, Oct 5 (Reuters) - Toronto's main stock index rose to a two-week high on Friday as unexpectedly strong North American jobs data supported demand for riskier assets.
The U.S. unemployment rate dropped to a near four-year low of 7.8 percent in September, a potential boon to President Barack Obama's reelection bid.
In Canada, the economy added 52,100 jobs in September, more than five times the consensus figure analysts had expected, and bolstering the Bank of Canada's case for an eventual interest rate rise.
Still, the advance in stocks was modest, and trading choppy, with strength in financials offset by weakness in commodity shares as investors hesitated to place big bets ahead of an extended weekend in Canada and the United States.
On Monday, Canadian markets will close for Thanksgiving, while U.S. government offices and some financial markets will close for Columbus Day.
"The market has acted well and the only reason that it might be muted a little bit is because of the long weekend here and in the U.S. and people not wanting to carry positions for three days," said John Kinsey, portfolio manager at Caldwell Securities.
Among the top gainers, Manulife Financial
rose 2.1 percent to C$12.44, Royal Bank of Canada was up 0.6 percent to C$57.87 and Toronto-Dominion Bank added 0.5 percent to C$82.34.
Kinsey said Canadian banks are seen by many investors as a safe-haven on the index dominated by both financials and resources.
"Last quarter, all the five major banks increased their dividends, so that's obviously a good sign," said Kinsey. "They wouldn't do that if they didn't think that going forward wasn't going to be reasonable, and yields are pretty good."
At 10:37 a.m. (1437 GMT), the Toronto Stock Exchange's S&P/TSX composite index
was up 27.39 points, or 0.22 percent, at 12,475.07. Energy and gold mining shares were the main laggards as oil and gold prices fell. Canadian Natural Resources was down 0.6 percent to C$30.51, Yamana Gold slipped 1.4 percent to C$18.94 and Kinross Gold lost 1.8 percent to C$10.69. (Editing by Bernadette Baum)
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