By Jennifer Kwan

TORONTO (Reuters) - Toronto's main stock indexnotched its eighth straight session in the black Friday as astronger than expected U.S. employment report eased fears abouta sputtering recovery.

Toronto followed U.S. equities higher after data showedU.S. nonfarm employment fell less than forecast in August,while private payrolls growth was higher than expected.

Financials, often a play on the health of the economy, ledeight of the TSX's 10 main groups higher with an 1.3 percentadvance. Toronto-Dominion Bank rose 1.7 percent toC$74.40, while Royal Bank of Canada climbed 1 percentto C$52.80. Insurer Manulife surged 2.9 percent toC$13.23.

"Jobs numbers in the United States were better thanexpected. Not great, but still better," said Aaron Fennell,senior market strategist at Lind-Waldock Canada. "I think thatimplies to the market that the recovery is a little bitstronger than otherwise thought."

The Toronto Stock Exchange's S&P/TSX composite index finished the session up 33.83 points, or 0.28percent, at 12,144.92. Earlier, the index hit 12,197.89, itshighest level since May 13.

The index rose 2 percent on the week, its strongest showingsince early July.

The blue chip S&P/TSX 60 index closed 1.99 points,or 0.28 percent, higher at 708.03.

Gold prices edged lower as the U.S. jobs data underminedgold's safe-haven attraction.

"When there's bad news that drives the price of goldhigher. That wasn't a piece of bad news today," said Fennell,referring to the jobs data.

The global gold subsector of the TSX dropped nearly 1percent, weighing on the broader resource-laden materialssector, which fell 0.7 percent. Barrick Gold was off1.1 percent at C$47.09.

Goldcorp fell 3.7 percent to C$44.49, also pressuredby news it intends to buy Argentina-focused gold miner AndeanResources Ltd for C$3.6 billion, trumping a competingoffer from Eldorado Gold Corp.

Andean Resources, the top net gainer on the market, soared45 percent to C$6.98, while Eldorado fell 3 percent toC$19.89.

Potash Corp , down 1.1 percent at C$154.55,remained in the spotlight after a report said Chinese officialshave ordered state companies to meet investment bankers toexplore ways to block BHP Billiton's$39 billion bidfor Potash.

The TSX is closed on Monday for the Labour Day holiday.

($1=$1.04 Canadian) (Reporting by Jennifer Kwan; editing by Peter Galloway)