*TSX down 4.05 points at 12,364.60
*Half of 10 main sectors weaker (Updates to midday)
By Claire Sibonney
TORONTO, Oct 1 (Reuters) - Toronto's main stock index was little changed at midday on Friday as weak U.S. manufacturing data pulled it back from an early rally and as investors took a breather after the market notched big gains in September and in the third quarter.
"There's a lot to be positive about but there's a lot to be cautious about because the market is up a lot," said Ian Nakamoto, director of research at McDougall, MacDougall & MacTier.
Economically sensitive financial stocks fell 0.7 percent following a report that showed U.S. factory activity slipped last month. [ID:nN01241612]
Bank of Montreal (BMO.TO) lost 0.8 percent to C$59.03 and insurer Manulife Financial (MFC.TO) fell 0.9 percent to C$12.86.
The index's key energy sector, up 0.9 percent, and its materials group, up 0.1 percent, led the gainers as commodity prices rose.
Oil rose above $81 a barrel, gold prices hit a record high above $1,320 an ounce, while base metals rallied to their strongest in more than two years.
Oil company Canadian Natural Resources (CNQ.TO) jumped 3 percent to C$36.66 and base-metals miner Teck Resources TCKb.TO advanced 1.1 percent to C$42.79. Gold miner Barrick Gold (ABX.TO) added 0.2 percent to C$47.66.
Factors driving commodity prices higher included the weakening of the U.S. dollar on the prospect of quantitative easing by the Federal Reserve as well as Chinese data that showed manufacturing picked up steam in September, easing concerns about the global recovery. [FRX/] [ID:nSGE690072]
"I think the fears of a double dip (recession) are for the most part off the table and people have accepted the fact that we are in a low growth scenario," Nakamoto said.
At 12:34 p.m. (1634 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was off 4.05 points at 12,364.60. Earlier in the day the TSX rose to its highest level since September 2008. The index's 10 main groups were split between gains and losses.
Research In Motion RIM.TO, up 1.4 percent at C$50.79, was in the spotlight as the Indian government said it has manual access to chat communication on BlackBerry messenger services and expects to get automated access from Jan. 1 [ID:nSGE6900BX]
Alimentation Couche-Tard (ATDb.TO) was down 2 percent at C$22.55. It abandoned its $2 billion hostile takeover bid for Casey's General Stores (CASY.O) on Thursday, nearly half a year after it made its initial offer for the U.S. convenience store chain. [ID:nN30225942]
($1=$1.02 Canadian) (Additional reporting by Jennifer Kwan; editing by Peter Galloway)