Stocks slump after disappointing US jobs data

NEW YORK, United States — Global stock markets slumped Friday and oil prices tumbled following weaker than expected US jobs growth that pointed to a slowing economy.

The world's biggest economy added an estimated 142,000 jobs last month, an increase from the poor July figure, but below analysts' estimates. The unemployment rate meanwhile declined slightly from 4.3 percent to 4.2 percent.

Investors initially took the report as a glass half full, with stocks pushing higher, but then sentiment turned and shares tumbled.

The broad-based S&P 500 ended at 5,408.42, down 1.7 percent for the day and 4.2 percent for the week.

The lackluster job growth "played right into the market's worries about (economic) slowing," said Briefing.com analyst Patrick O'Hare, who noted that September has been a historically tepid period for equities.

The report comes as markets eye an expected Federal Reserve interest rate cut. Following the data, futures markets increased the odds of a smaller 25-basis-point reduction in rates instead of one twice that size.

Friday's data was consistent with "a weakening labor market, but not weak yet," said Steve Sosnick of Interactive Brokers.

There's been a shift in mood and sentiment is now against stocks, Sosnick said, "and it's never 100 percent clear why markets shift their mood like this."

Earlier, European stocks also closed decisively lower after having wobbled in afternoon trading.

Tokyo's stock market was weighed down Friday by a strong yen, which has picked up against the dollar on bets of a Fed rate cut and growing expectations that the Bank of Japan would continue hiking its own borrowing costs.

Oil prices finished down more than two percent with major contracts hitting fresh multi-month lows despite a move by OPEC+ exporters to delay a planned production boost.

The exporter group's "decision to defer their planned increases in supply has not been sufficient to halt the bleed," said a note from TD Securities that pointed to "continued deterioration in demand sentiment."

Among individual companies, Broadcom slumped 10.4 percent on disappointment over the chip company's revenue forecast.

Key figures around 2040 GMT

New York - Dow: DOWN 1.0 percent at 40,345.41 (close)

New York - S&P 500: DOWN 1.7 percent at 5,408.42 (close)

New York - Nasdaq Composite: DOWN 2.6 percent at 16,690.83 (close)

London - FTSE 100: DOWN 0.7 percent at 8,181.47 (close)

Paris - CAC 40: DOWN 1.1 percent at 7,352.30 (close)

Frankfurt - DAX: DOWN 1.5 percent at 18,301.90 (close)

Tokyo - Nikkei 225: DOWN 0.7 percent at 36,391.47 (close)

Hong Kong - Hang Seng Index: (closed)

Shanghai - Composite: DOWN 0.8 percent at 2,765.81 (close)

Dollar/yen: DOWN at 142.29 yen from 143.45 yen on Thursday

Euro/dollar: DOWN at $1.1089 from $1.1111

Pound/dollar: DOWN at $1.3132 from $1.3174

Euro/pound: UP at 84.41 pence from 84.33 pence

Brent North Sea Crude: DOWN 2.2 percent at $71.06 per barrel

West Texas Intermediate: DOWN 2.1 percent at $67.67 per barrel