CANADA STOCKS-TSX stumbles as commodities pull back

(Updates to late afternoon)

* TSX down 41 points, or 0.3 pct, at 12,406.68

* Energy and materials fall; financials edge up

By Claire Sibonney

TORONTO, Oct 5 (Reuters) - Toronto's main stock index backedaway from its highest level in nearly three weeks on Friday asconcerns about weakness in the global economy hurt commodityprices, countering unexpectedly strong North American jobs data.

U.S. crude oil futures settled down nearly $2 a barrel assigns this week of the slowing manufacturing and servicessectors in Europe and China continued to weigh on investorsentiment.

Energy stocks followed suit, falling 0.9 percent. Thebiggest laggards included Canadian Natural Resources


down 1.4 percent to C$30.28, Suncor Energy

, down 0.8percent to C$32.88 and Encana Corp, off 2.5 percent toC$21.30.

"Concerns remain about the outlook for global growth,particularly demand out of high consumption emerging marketslike China, so we've gotten a little bit of weakness there,"said Craig Fehr, Canadian market strategist at Edward Jones inSt. Louis.

"Added to that is a strengthening U.S. dollar and all that'scoming together to push oil prices lower. Given the sensitivityto resource prices in the TSX we're seeing a little bit ofweakness there," he added.

Gold miners were also down sharply, off 1.1 percent, asbullion retreated from an 11-month high.

Yamana Golddropped 2.9 percent to C$18.65, BarrickGold

fell 0.8 percent to C$41.04 and Kinross Gold

lost 2.5 percent to C$10.61.

At 3:28 p.m. (1928 GMT), Toronto Stock Exchange's S&P/TSXcomposite index

was down 41.00 points, or 0.33percent, to 12,406.68. Eight of the 10 sectors were negative.Financials edged up 0.1 percent. Earlier, the index itsstrongest intraday level since Sept. 17.

Better-than-expected employment data from Canada and theUnited States helped stem the losses.

In Canada, the economy added 52,100 jobs in September, morethan five times the consensus figure analysts had expected, andbolstering the Bank of Canada's case for an eventual interestrate rise.

Meanwhile, the U.S. unemployment rate unexpectedly droppedto 7.8 percent in September, reaching its lowest level sincePresident Barack Obama took office and providing a boost to hisre-election bid.

On Monday, Canadian markets will be closed for Thanksgiving,while U.S. government offices and some financial markets willclose for the Columbus Day holiday, prompting some investors tostay on the sidelines.

"Quite often on the Friday before a long weekend there'ssome selling coming into the market because people don't want tocarry positions for three days," said John Kinsey, portfoliomanager at Caldwell Securities.

(Editing by Gary Crosse)

((claire.sibonney@thomsonreuters.com)(+1 416 941 8142)(ReutersMessaging: claire.sibonney.reuters.com@reuters.net))


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