Weak US Jobs Data Weighs on Markets

Weak US Jobs Data Weighs on Markets

LONDON (AP) -- Lower than expected U.S. payrolls figures weighed on European stock markets and U.S. futures Friday as investors worried about the strength of the U.S. economy.

KEEPING SCORE: In Europe, stocks shed their earlier gains and many indexes went into the red. Germany's DAX fell 0.4 percent to 9,471 while the CAC-40 in France was 0.4 percent lower at 4.406. The FTSE 100 index of leading British shares was up 0.2 percent at 6,082. Wall Street was poised for a lower opening with Dow futures and the broader S&P 500 futures down 1.2 percent.

JOBS DISAPPOINTMENT: U.S. government figures showed that hiring slowed sharply in September, while job gains for July and August were lower than previously thought. The Labor Department said employers added just 142,000 jobs in September, way lower than the 200,000 anticipated in the markets. The unemployment rate remained 5.1 percent, but only because more Americans stopped looking for work and were no longer counted as unemployed. This was the second straight payrolls disappointment.

THE CONTEXT: The payrolls figures often set the market tone for a week or two after their release, especially at a time when investors are assessing the likelihood of a rate hike from the Federal Reserve. Most in the markets thought the Fed was heading towards a rate hike in December, which would be its first in more than nine years. Friday's data raises questions over that. As a result, the dollar fell sharply after the data, with the euro up 0.9 percent at $1.1292.

ANALYST TAKE: "The data pretty much ends thoughts of October being 'live', but it is too early to bury December tightening hopes completely," said Alan Ruskin, an analyst at Deutsche Bank. "Nonetheless, two weak reports start to show lost growth momentum."

ASIAN SCORECARD: Markets in the region drifted, with Japan's Nikkei 225 rising less than 0.1 percent to end at 17,725.13. South Korea's Kospi slipped 0.5 percent to 1,969.68. Hong Kong's Hang Seng rebounded after a holiday, jumping 3.2 percent to 21,506.09 in a delayed reaction to a report that showed a small improvement in Chinese manufacturing. Australia's S&P/ASX 200 lost 1.2 percent to 5,052.00. Markets in mainland China are closed for holidays until Oct. 8.

ENERGY: Benchmark U.S. crude oil rose 11 cents to $44.84 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, a benchmark for international oils, fell 22 cents to $48.47 in London.