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US stocks tumble on jobs report
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US stocks suffered big losses Friday as investors tried to digest the closely-watched jobs data amid global sell-offs.
The Dow Jones Industrial Average shed 272.38 points, or 1.66 percent, to 16,102.38. The S&P 500 slipped 29.91 points, or 1.53 percent, to 1,921.22. The Nasdaq Composite Index dropped 49.58 points, or 1.05 percent, to 4,683.92.
US nonfarm payrolls data came out mixed, beating estimates on the unemployment rate and wage indicators.
The Labor Department reported Friday that total nonfarm payroll employment added 173,000 in August, well below market consensus of 223,000. Over the prior 12 months, employment growth had averaged 247,000 per month.
The unemployment rate, however, inched down to 5.1 percent, beating market estimates of 5.2 percent and logging the lowest level in seven years.
In August, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to US$25.09, also higher than market expectations.
The jobs report is the final read on monthly labor conditions before the Federal Reserve makes a decision on interest rates at its next policy meeting in about two weeks.
"A below-consensus headline with a big upward revision adds up to economic data good enough to justify a rate hike in two weeks if economic data were all that mattered," said Chris Low, chief economist at FTN Financial, in a note.
"We think the FOMC (the Federal Open Market Committee) will elect to raise rates, but they can still talk themselves out of it if they try," he added.
Dampening Wall Street sentiment, overseas stock markets also decreased broadly.
European shares plunged on Friday, with Germany's benchmark DAX index on the Frankfurt Stock Exchange diving 2.71 percent, as the uncertainty of a rate hike by the US central bank weighed on market.
In Asia, Tokyo stocks dropped 2.15 percent on Friday, with its benchmark Nikkei stocks index briefly down more than 500 points in the afternoon trading, amid caution ahead of crucial US labor market data. Chinese equities were closed for a second straight day for a public holiday.
On a weekly basis, all three major indices saw deep declines, with the Dow, the S&P 500 and the Nasdaq shedding 3.2 percent, 3.4 percent and 3.0 percent, respectively.
US stock markets will be closed Monday for the Labor Day holiday.
The CBOE Volatility Index, often referred to as Wall Street's fear gauge, rose 8.55 percent to end at 27.80 Friday.
In other markets, oil prices dropped Friday amid ample supplies of global crude.
The West Texas Intermediate for October delivery moved down 70 cents to settle at US$46.05 a barrel on the New York Mercantile Exchange, while Brent crude for October delivery decreased US$1.07 to close at US$49.61 a barrel on the London ICE Future Exchange.
The US dollar traded mixed against other major currencies on Friday as the key jobs report failed to give clear signals about whether the Federal Reserve will raise interest rates later this month.
In late New York trading, the euro rose to US$1.1148 from US$1.1221 in the previous session, while the dollar bought 118.93 Japanese yen, lower than 120.00 yen of the previous session.
Gold futures on the COMEX division of the New York Mercantile Exchange settled slightly lower on Friday following the monthly US jobs report.
The most active gold contract for December delivery lost US$3.10, or 0.28 percent, to settle at US$1,121.40 per ounce.
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