* TSX falls 96.13 points, or 0.8 percent, to 12,650.42 * Nine of 10 main sectors decline * Index on track for monthly gain * Rainy River soars after bid from New Gold * RBC slips, market's biggest negative influence By Solarina Ho TORONTO, May 31 (Reuters) - Canada's main stock index retreated sharply on Friday as lower commodity prices triggered a slump in shares of natural resource companies and weak economic data out of Europe and the United States dampened investor sentiment. While almost every major sector declined, the index still looked on track for a gain in May, reversing losses in the previous two months. South of the border, U.S. stocks ended down 1 percent on Friday, but all three index were positive for the month, with the S&P 500 rising 14.34 percent so far this year - its best first five months since 1997. The TSX, which is up about 1.6 percent this month and 1.7 percent for 2013, slipped 0.2 percent on the week. "It wasn't really surprising to see a degree of profit-taking on the last day of the month," said Elvis Picardo, strategist and vice president of research at Global Securities. The Toronto Stock Exchange's S&P/TSX composite index finished 96.13 points, or 0.8 percent lower, at 12,650.42, after falling as low as 12,620.08 earlier. Data showed that unemployment reached a new high in the euro zone and inflation remained well below the European Central Bank's target. U.S. consumer spending fell in April for the first time in almost a year and inflation pressures were subdued, pointing to a slowdown in economic activity. The commodities-exporting market, which has been hit sharply this year by volatility in resource prices, reacts to global economic trends because of its large exposure to materials and energy stocks. "You boil all this (data) together and you get an economic stew around the world that continues to be one of positive growth, but certainly not as quick as most investors would like or up to capacity," said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, Missouri. The growth prospects for the global economy look better in the second half of the year than in the first half, Fehr said. "As the global growth story starts to improve, Canada's stock market and the economy should benefit from that," he added. Official data showed rising exports helped rouse the Canadian economy from a sluggish second half of 2012 to grow at an annualized rate of 2.5 percent in the first quarter, the fastest pace in six quarters. Nine of the index's 10 main sub-groups stumbled into negative territory. The materials sector, which includes mining stocks, shed 0.6 percent. The prices of commodities such as gold and silver declined. In company news, New Gold Inc agreed to acquire gold exploration company Rainy River Resources Ltd for about C$310 million ($301 million) to expand its asset base in Canada. New Gold shares fell 8 percent to C$7.05, but Rainy River surged 34.8 percent to C$3.64. A drop in oil prices pulled energy shares down 0.9 percent. Canadian Natural Resources Ltd slipped 3.3 percent to C$30.90. Suncor Energy gave back 1.9 percent to C$31.45. Financials, the index's most heavily weighted sector, gave back 1 percent. Royal Bank of Canada extended Thursday's losses amid uncertainty about its future growth after it reported in-line quarterly results. Canada's biggest bank lost 2.1 percent to C$61.53 and played the biggest role of any single stock in leading the market lower.