* TSX ends down 98.33 points, or 0.77 pct, at 12,602.41
* Index ends week 2.2 percent higher
* Eight of 10 sectors weaker, materials rise on gold (Adds details, comments)
By Claire Sibonney
TORONTO, Sept 2 (Reuters) - Toronto's main stock index ended lower on Friday after grim U.S. jobs numbers revived recession fears, but rallying gold miners helped cushion the fall.
Oil and gas shares were among the hardest hit as riskier assets were sold off after data unexpectedly showed U.S. employment growth ground to a halt in August. [ID:nOAT004865]
U.S. crude futures dropped more than $2 a barrel following the report, sending Suncor Energy SU.TO down 3.2 percent to C$30 and Canadian Natural Resources CNQ.TO down 3.7 percent to C$34.93.
"From a technical analysis perspective it looks like (oil) is headed lower, in part reflecting the greater uncertainty of economic growth," said Robert McWhirter, president and portfolio manager at Selective Asset Management Inc.
"We're still of the view that economic growth will be slow, but will accelerate in the second half of this year ... however there are a lot of people who are having greater concern about the increased risk of recession," he added.
Offsetting the decline, gold miners climbed 3 percent to the top of the gainers list, tracking higher bullion prices, which neared $1,900 an ounce on safe-haven buying. [GOL/]
Barrick Gold ABX.TO jumped 3.1 percent to C$51.97, Goldcorp G.TO advanced 3.1 percent to C$53.76, and Yamana Gold YRI.TO surged 5.5 percent to C$16.58.
"Near term, you don't want to be underweight gold," said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver.
"If you actually look at the changes in gold prices versus changes in gold stocks over the last three months, there's a lot of value in gold stocks versus the underlying commodity," he added, pointing to small and mid-cap names that could be takeover targets.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed 98.33 points, or 0.77 percent, lower at 12,602.41. The index ended the week 2.2 percent higher.
The TSX pared earlier losses of more than 1 percent as the materials group - home to gold miners - gained 1.5 percent. Telecoms also rose 0.25 percent, while the rest of the index's 10 sectors were weaker, including financials, off 1.3 percent.
Laurentian Bank LB.TO lost 0.9 percent to C$43.20 despite reporting a 17 percent increase in net income as loan losses fell, beating analysts' earnings expectations. [ID:nN1E7810G9]
"Even with all these good earnings on all these banks, you can see the bank shares haven't done much ... it's such a tough environment for banks right now given that the yields are so low," Xu said.
"And typically in this part of the business cycle ... banks don't usually outperform, they usually underperform. They're usually late-cycle boomers."
In technology issues, Research In Motion RIM.TO plunged 4.6 percent to C$29.59 after big box retailer Best Buy slashed up to $150 off the U.S. price tag for RIM's PlayBook tablet computer for the Labor Day weekend. [ID:nN1E78021B]
WiLan Inc WIN.TO edged up 0.4 percent to C$7.09 after the technology licensing company said it had begun its patent infringement cases against Apple Inc, Dell, Hewlett-Packard and six other companies. [ID:nL4E7K21GT]
In other individual company news, Silvercorp Metals SVM.TO sank nearly 10 percent to C$7.43. China-focused miner Silvercorp denied anonymous allegations of fraud on Friday, but its stock swooned on fears that charges like those that sank Sino-Forest TRE.TO were claiming another victim. [ID:nN1E7810DH]
North American markets will be closed on Monday for the Labor Day holiday. Some highlights next week are U.S. non-manufacturing ISM data on Tuesday, the Bank of Canada interest rate announcement on Wednesday and Canadian monthly employment figures on Friday. ECONCA
($1=$0.98 Canadian) (Editing by Jeffrey Hodgson)