*TSX down 51.16 points at 12,622.15
*All 10 sectors weaker (Recasts, updates to mid-afternoon)
By Claire Sibonney
TORONTO, Oct 14 (Reuters) - Toronto's main stock index retreated on Thursday afternoon from the two-year high it hit the day before, pulled down by weak U.S. economic data despite rallying commodity prices.
All three of the index's heavyweight sectors were hit -- energy, down 0.9 percent, materials, down 0.2 percent, and financials, off 0.2 percent.
Data showed new U.S. claims for jobless benefits rose unexpectedly last week, hardening the view that the U.S. Federal Reserve will pump more money into the economy in hopes of boosting growth and lowering unemployment. [ID:nN14277059]
Other data on Thursday showed record-high imports from China helped widen the U.S. trade deficit wider in August, which could drag on U.S. growth and increase international tensions over trade and currency policy.
"You've got stocks and commodities north and south of the border that have done extremely well in a very short period of time, so any one day's price movement is probably not terribly illuminating," said Stephen Wood, chief market strategist at Russell Investments in New York.
"It could be profit-taking ... for Canada the loonie is getting very, very, very strong, and this is obviously going to have macro-economic consequences for exports and manufacturers north of the border."
Canada depends on the United States to take in about three-quarters of its exports, which are tilted toward commodities like oil, metals, and natural gas.
The demand for those exports is expected to be pressured by broad U.S. dollar weakness, which on Thursday allowed the Canadian dollar to pierce parity with the greenback for the first time since April. [CAD/]
Base-metal miners were up 0.4 percent as copper touched its highest in two years. Teck Resources TCKb.TO advanced 0.8 percent to C$46.36. [MET/L]
At 2:10 p.m. (1810 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 51.16 points, or 0.4 percent, at 12,622.15. All of its 10 sectors were lower.
"We're definitely due for a bad day," said Barry Schwartz, vice-president and portfolio manager at Baskin Financial Services. "Nothing goes straight up."
$1=$1.01 Canadian Reporting by Claire Sibonney; editing by Peter Galloway