* TSX ends down 39.54 points, or 0.32 pct, to 12,191.05 * Canadian Natural drops 3.2 percent * Eight of 10 sectors decline By John Tilak TORONTO, Nov 8 (Reuters) - Canada's main stock index finished at its lowest close in more than two months on Thursday, as shares of Canadian Natural Resources Ltd slumped after the oil and gas producer cut its output forecast, dragging on the energy sector. Shares reversed earlier gains in a bumpy session as investors sifted through U.S. jobs data that indicated improvement in the labor market and as the European Central Bank left interest rates unchanged. Investors also continued to worries over whether the United States will reach a compromise to address its budget deficit and avert a "fiscal cliff" of $600 billion in scheduled tax increases and spending cuts beginning in January, which is seen threatening the country's economic recovery . "We have a gridlock. The market is saying, 'Show us something. Show us that you can resolve the problems that are out there,'" said Levente Mady, senior portfolio manager at PI Financial Corp. The Toronto Stock Exchange's S&P/TSX composite index ended down 39.54 points, or 0.32 percent, at 12,191.05, its lowest close in more than two months. Earlier it hit an intraday low of 12,164.11, its softest level since Oct. 23. Eight of the index's 10 main sectors ended in negative territory. Energy and financial shares led the decline, falling 1.2 percent and 0.6 percent, respectively. Shares of Canadian Natural Resources fell 3.2 percent to C$28.02 after the country's biggest independent oil and gas producer reported a 57 percent fall in quarterly profit and cut its full-year forecast for crude oil and natural gas liquids output. It played the biggest role of any single stock in leading the market lower. Some of Canada's major banks also dragged on the index. Royal Bank of Canada, the country's biggest bank, fell 1.1 percent to C$55.72, and Toronto Dominion Bank lost 0.9 percent to C$80.30. "If things are not worked out, the financials are going to be bearing the brunt. It is a very risky part of the market," Mady said. The market's losses were partially offset by gains in Kinross Gold Corp, up 8.8 percent at C$10.16, and Sun Life Financial, up 3.9 percent at C$25.31. Kinross on Wednesday posted a third-quarter profit that topped expectations and said it expects to meet the higher end of its production targets for the year. Sun Life, Canada's No. 3 life insurer, said after markets closed on Wednesday that it swung back to a third-quarter profit due to better results from investments. Sun Life's chief executive told Reuters on Thursday the company is sticking with an admittedly "ambitious" target of C$2 billion in operating profit by 2015, despite a difficult outlook for financial markets. Gold miners made gains as prices for bullion surged in a volatile session. Barrick Gold Corp rose 1.1 percent at C$36.56 and Goldcorp Inc climbed 0.9 percent to C$44.91.