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TSX ends down 0.3% at 23,956.8

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For the week, the index gains 0.4%

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Materials group pulls back 2.1%

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Energy rallies 2%; oil settles 0.8% higher

(Updates at market close)

By Fergal Smith

Sept 27 (Reuters) - Canada's main stock index ended

lower on Friday but still notched its third straight weekly

gain, helped by recent central bank interest rate cuts that

entice investors to move out of cash into high-dividend paying

stocks.

The Toronto Stock Exchange's S&P/TSX composite index

ended down 77.01 points, or 0.3%, at 23,956.82, after

posting a record closing high the day before.

For the week, the index was up 0.4%, adding to gains in the

previous two weeks.

"Value strategies as well as dividend-yield products and

low-vol (volatility) methodologies have been doing quite well,"

said Sid Mokhtari, chief market technician for CIBC Capital

Markets. "They are scoring well because of the fact that a rate

cut cycle in the U.S. has begun."

The Federal Reserve is expected to ease interest rates

further over the coming months after cutting last week for the

first time in four years.

The Bank of Canada has also been lowering borrowing costs.

Canada's gross domestic product rose 0.2% rate in July, but an

advance estimate indicated that growth likely stalled in August,

bolstering hopes for a super-sized rate cut next month.

"We still think there are plenty of investments that are

still sitting within term deposits and GICs (guaranteed

investment certificates) that may find their way into equities

that have a higher yielding backdrop, and that has been buoying

the financials and REITs and telecoms," Mokhtari said.

The materials group fell 2.1% on Friday, giving back some

recent gains, as the price of gold pulled back from a

record high.

Technology ended 1.7% lower, with shares of Blackberry Ltd ( BB )

declining 2.3% after the company's second-quarter

results failed to impress investors.

Energy helped limit the TSX's decline. It rallied 2% as oil

settled 0.8% higher at $68.18 a barrel, clawing back some recent

losses.