TORONTO (Reuters) - The Toronto Stock Exchange's main index sagged nearly 100 points yesterday, dragged lower as resource shares were stung by falling metal prices amid worries over dampening demand.

Prices for copper and other metals fell following weak US jobs data that fuelled worries over the health of the economy, sending the resource-laden materials sector down. Among the laggards, Inmet Mining was off 4.4 percent.

Economic data out of the United States set the tone early as the unemployment rate hit its highest level in four years in July, while employers cut jobs for a seventh straight month.

The number of jobs cut was less than expected, which provided some initial relief, but the tone turned negative as investors fretted over the gloomy economic picture.

"Employment is typically a lagging indicator, so it will likely continue to deteriorate for a while, and I think the current numbers pretty much reflect that," said Bob Gorman, chief portfolio strategist at TD Waterhouse. "The rate of unemployment is likely to edge somewhat higher here and that has an effect on market sentiment, no question."

The S&P/TSX composite index closed down 96.38 points, or 0.71 percent, at 13,496.53 with six of its 10 main sectors in the negative.

The materials sector was down 2.2 percent, with Teck Cominco off C$2.03, or 4.3 percent, at C$45.00, and Inmet down C$2.85 at C$62.08.

Nortel Networks gave up C$1.19, or 15.2 percent, to close at C$6.66 after the company said its quarterly loss tripled and warned that a tough US market is hampering wireless spending by telecom firms.

Nortel helped drag the tech sector down 4.4 percent, while BlackBerry-maker Research In Motion slipped C$2.32, or 1.8 percent, to C$123.52.

The TSX index was up 0.9 percent for the week, helped by a more than 300-point gain on Wednesday, which saw energy shares climb along with oil prices, while mining issues rose in the wake of Teck Cominco's takeover bid for Fording Canadian Coal Trust .