* TSX down 55.86 points, or 0.47 percent, at 11,724.21
* Seven of 10 main sectors lower
* Material sector drags as gold miners, Potash Corp slip (Adds detail, analyst comment)
By Julie Gordon
TORONTO, Oct 7 (Reuters) - Toronto's main stock index fell on Friday, largely ignoring unexpectedly strong Canadian and U.S. jobs data, with the materials sector dragged down by gold and base metal miners.
The heavyweight sector, which benefited from a two-day rally this week, dropped 0.43 percent in early trade as shares of the world's top gold producer, Barrick Gold (ABX.TO), slipped 1.9 percent to C$48.62 and Goldcorp (G.TO) fell 2.15 percent to C$48.18.
The stocks slipped even with gold prices edging up toward their biggest weekly gain in a month as the U.S. dollar softened after unemployment data. [GOL/] [FRX/]
"This spread between gold companies and bullion itself, it just continues to be as wide as the grand canyon," said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc. "There's no sense that this is looking to close anytime soon."
Fertilizer producer Potash Corp (POT.TO) was the biggest loser on the index, slipping 3.23 percent to C$46.80 as Chicago wheat futures gave up early gains to slip more than 1 percent.
At 11:31 a.m. (15:31 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 55.86 points, or 0.47 percent, at 11,724.21.
Stocks fell even after a report of better-than-expected jobs growth, which helped slice Canada's unemployment rate to 7.1 percent in September, boosting its currency and virtually ensuring the central bank won't cut rates any time soon. [ID:nN1E796020]
In the United States, the Nasdaq fell over 1 percent as stocks struggled to make headway following a three-day market rally, even after a report showed the U.S. economy added more jobs than expected in September. [.N]
The dip in Canadian stocks comes after two days of gains, as commodities rallied and U.S. economic data came in better than expected.
"It's been a pretty profitable week and somewhere along the way we're going to give back a little bit," said Fred Ketchen, director of equity trading at ScotiaMcLeod. "There's just a little bit of caution showing here in markets this morning."
The top gainer on the index at mid-morning was First Quantum Minerals (FM.TO), which rose 2.72 percent to C$17.02 after the base metal miner said it would resume production at its Ravensthorpe nickel mine in Australia by the end of the year. [ID:nL3E7L50KN]
Also gaining were Canadian Oil Sands COS.TO, up 1.84 percent to C$21.03 and Cenovus Energy (CVE.TO), up 0.53 percent to C$33.89 as U.S. crude futures headed for their biggest weekly gain in seven months, though Canadian Natural Resources (CNQ.TO) dropped 1.59 percent to C$30.97, dragging the energy sector negative.
Analysts said that overall market conditions, including the ongoing debt crisis in Greece, would likely keep Canadian stocks in check over the coming weeks.
"I don't think the conditions are right to have this market all of a sudden just continue running higher and higher, day after day, week after week," said Ketchen.
($1=$1.05 Canadian) (Editing by Jeffrey Hodgson)