(Updates with morning prices)

By Ragini Mathur

Oct 10 (Reuters) - Canada's main stock index struggled

to find direction on Friday, poised for modest weekly losses,

while investors reduced their rate cut expectations following a

surprisingly strong employment report.

At 10:15 a.m. ET (1415 GMT), Toronto's S&P/TSX composite

index was down 0.1% at 30,239.26 points, on track to

close the week with about a 0.6% decline.

The heavyweight materials sector and information

technology stocks fell by 0.4% and 0.3%, respectively, while

healthcare stocks suffered the steepest loss, down

2.2%, with drugmaker Bausch Health ( BHC ) dropping 4.7%.

On the data front, Canada's economy added a surprising

60,400 jobs in September, nearly reversing the previous month's

losses, yet the unemployment rate remained at a nine-year high

of 7.1%, excluding pandemic years.

"The jobs created this month is a lot in the absolute and

compared to the consensus expectation, but we ought not to

forget that it merely regains most of the jobs that were lost

last month," said Brian Madden, chief investment officer at

First Avenue Investment Counsel Inc.

Following the strong employment data, traders scaled back

expectations for a 25-basis-point rate cut at the Bank of

Canada's October 29 meeting, with the probability dropping to

53% from 72% before the report's release.

"It depends how you look at it, and we have this debate

internally all the time - would you rather have interest rates

1/4 point lower or have 60,000 more people working in this

country? I think I'd prefer the latter," Madden added.

The Canadian dollar strengthened 0.2% against the

greenback after the data.

Back in the markets, the consumer discretionary sector

emerged as the best performer, rising 0.7%, with

clothing retailer Aritzia ( ATZAF ) surging 11.2% to an all-time

high after reporting quarterly revenue above estimates.