TORONTO (Reuters) - Toronto's key stock index fell yesterday as early strength credited to a better-than-expected US jobs report faded as investors accepted that the big job losses in the report underscored the severity of the economic downturn.

After being down two percent late in the session and hitting its lowest level in more than five years, the key index started to rally in the closing minutes as higher oil prices helped boost energy shares.

But the rally fell short and left the index just below the break-even level for the day as weakness in the technology, financial and materials sectors combined to more than offset the energy rally.

BlackBerry maker Research In Motion, one the key drags on the index, ended down 4.55 percent at C$46.60, insurer Manulife Financial fell 3.5 percent to C$9.65, and gold producer Goldcorp skidded 1.6 percent to C$37.82.

"We saw strength earlier in the day but it's been a familiar pattern where if you see some strength, the selling invariably starts and markets again trend lower," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

"The big driver today was US jobless numbers and at some points it seemed like the markets were taking that in stride but that didn't last very long."

The data from the US showed 651,000 jobs lost in February, a huge number but fewer than some analysts had expected, but as the session wore on the data served as a reminder of the dire economic situation in Canada's largest trading partner.

The S&P/TSX composite index closed down 37.7 points, or 0.49 percent, at 7,591.47, after earlier in the session touching its lowest level since October 2003.

The market rallied early in the session, with the index up as much as 1.77 percent. On the week it was down 6.3 percent.