(Reuters) -- Toronto's main stock index finished lower for the first time this year on Friday, as resource and financial issues fell after Canadian and U.S. jobs data failed to impress investors.

The market initially rose on data that showed the U.S. economy added 200,000 jobs in December and the jobless rate dipped to a near three-year low. But on second glance Friday's report underwhelmed in the wake of Thursday's standout private sector ADP report.

Investors were setting themselves up for a really good jobs number and it didn't happen, said Elvis Picardo, strategist and vice president of research at Global Securities.

Canada's employment picture was worse. A Statistics Canada report showed the economy gained 17,500 jobs in December, but the unemployment rate rose to its highest level since April and the new positions were all part time, a sign the economy is slowing.

It's the third month in a row that the Canadian numbers have come in below expectations while the U.S. has posted incremental improvement, said Picardo. It seems to indicate that we may be in for a challenging year ahead.

Seven of the Canadian market's 10 main sectors were down, led by a 0.6-percent drop in energy and material shares.

Talisman Energy TLM.TO, down 5.4 percent to C$12.68, and Potash Corp (POT.TO: Quote), which slid 2.3 percent to C$42.94, led the day's decliners.

Potash, the world's biggest fertilizer maker, said it will halt production of the crop nutrient at its mine at Allan, Saskatchewan, for four weeks, its third plant shutdown in the province this winter, as demand softens.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 48.76 pts, or 0.4 pct, at 12,188.64, ending five straight days of gains.

For the first week of the new year, the index was still up nearly 2 percent as financial and resource stocks were boosted by encouraging U.S. and China economic data that offset concerns about Europe's lingering debt crisis.

On Friday, financials were down 0.4 percent, led by Royal Bank of Canada (RY.TO: Quote), which slipped 0.6 percent to C$52.05. The sector was still up more than 1 percent so far this year.

At this point in time with some indication that the (Canadian) economy will be slowing down you could see some profit taking creep back into Canadian banks and the rest of the financial sector, said Picardo.

Meanwhile, Europe's debt crisis stayed in the spotlight. The euro hit a near 16-month low against a robust greenback as investors compared sovereign funding concerns and the outlook for the euro zone to an improving U.S. economic recovery.

Next week, investor attention will shift to the start of North American earnings season as a further gauge on the health of the market on this side of the Atlantic.

Good numbers will tend to push Europe on to the backburner for now, but if the numbers don't beat expectations then sentiment could be hit again, noted Picardo.

Most Canadian companies don't start reporting earnings until later in the month.

($1 = $1.02 Canadian)