* TSX falls 81.56 points, or 0.68 percent, to 11,848.23 * Materials sector down nearly 2 percent * Poseidon Concepts down 54 percent on results, forecast By John Tilak TORONTO, Nov 15 (Reuters) - Canada's main stock index tumbled to a three-month low on Thursday, dragged down by the material and financial sectors, as soft U.S. and European economic data dampened investor sentiment. The materials sector, home to mining companies, dropped nearly 2 percent, with Goldcorp Inc down 1.25 percent at C$40.77 and Barrick Gold falling 1.44 percent to C$33.50. Gold prices fell more than 1 percent to a one-week low. Financial markets have also been hit by ongoing fears about budget negotiations in Washington, the failure of which could trigger tax hikes and spending cuts that could push the U.S. economy, the world's biggest, into recession. "We're bouncing up and down like a yo-yo on a very long string. This is a very long, emotion-fueled week for the market," said Barry Schwartz, portfolio manager at Baskin Financial Services. "We're looking for some clarity from our neighbors in the south." Data on Thursday showed the euro zone slipped back into recession in the third quarter, its second recession since 2009, and the United States reported a spike in new claims for jobless benefits last week. The Toronto Stock Exchange's S&P/TSX composite index was down 81.56 points, or 0.68 percent, at 11,848.23 by late morning. Earlier in the session, the index fell to 11,761.34, its lowest point since Aug. 7. POSEIDON PLUNGES Energy services company Poseidon Concepts Corp lost more than half its value and was the single largest drag on the Toronto market. Its shares fell nearly 55 percent to C$6.01, after it posted weak results and cut its outlook. The financial subgroup declined 0.33 percent as the macroeconomic concerns hit markets. Bank of Montreal fell 0.92 percent at C$57.18 and Fairfax Financial dropped 3.5 percent to C$357.61. However, Manulife Financial Corp shares rose 0.17 percent to C$11.98. Canada's largest life insurer said it had promoted Paul Rooney, currently the head of the Canadian division, to chief operating officer. Research in Motion shares rose 2.47 percent to C$8.72, a day after its chief executive expressed confidence that a new line of BlackBerry 10 devices would offer long-term value for unhappy shareholders.