Market Update & Important Indicators:
U.S. stocks slipped Friday after a slightly weaker-than-expected jobs report. The Dow Jones Industrial Average declined 0.2% and the Nasdaq Composite shed 0.3%. The S&P 500 fell 0.3%, leaving it down 0.7% for the week. Steady dividend-paying stocks led the declines, as more investors warmed to the idea that higher interest rates are likely before the end of the year. For the week, the S&P 500 utilities sector fell 3.8%. The Labor Department said Friday the U.S. economy added 156,000 jobs in September. That fell slightly below expectations, but many analysts said it wasn't weak enough to challenge the prevailing narrative that the U.S. Federal Reserve will raise short-term interest rates by December. Federal-funds futures showed a roughly 66% chance of a rate increase by year-end, little changed from the previous day's 63%, according to CME Group data. Meanwhile, U.S. oil prices dropped to $49.81 a barrel Friday after closing above the $50-a-barrel mark at their highest level since June the day before.
European stocks closed lower after a brief 6% drop in the pound during Asian trading hours was perceived as scaring investors out of riskier assets. The Stoxx Europe 600 index fell 0.9% Friday, deepening its weekly loss to 1%. London's export-heavy FTSE 100 index, which tends to move counter to the British currency, rose 0.6%, among the only European stock markets in positive territory. Among other national benchmarks in Europe, Germany's DAX 30 index fell 0.7%, while France's CAC 40 index gave up 0.7%.
Market worries sent Asian equities broadly lower on Friday, as increasingly heated discussions over the U.K.'s exit from the European Union sent the pound plunging against the U.S. dollar. Japan's Nikkei Stock Average closed down 0.2%, but ended the week up 2.5%. Australia's S&P/ASX 200 was 0.3% lower, wrapping up the week with a 0.6% gain. Hong Kong's Hang Seng Index shed 0.4% Friday, but still ended the week up 2.4%. Markets in China were closed for the Golden Week holiday. In Hong Kong, stocks with large exposure to the U.K. declined markedly, reacting to the pound's precipitous drop. The pound's drop also had unexpected benefits for some Japanese financial majors which had hedged their sterling exposure after the Brexit vote. Still, some analysts said they don't expect much impact from the pound's plunge on wider markets, at least in the short term.
Australian shares notched up a third-straight week of gains despite slipping Friday in cautious trading ahead of U.S. jobs data that may add support to the view the Federal Reserve will lift interest rates before the end of the year. Despite gains in energy stocks and another advance by the major banks, losses in most other sectors left the S&P/ASX 200 down 15.6 points, or 0.3%, for the day at 5467.4. For the week, the index picked up by 0.6% as the advance so far this year widens to 3.2%.
On the London Metal Exchange, copper for delivery in three months was up 0.46% at $4,778/t. Aluminium was flat at $1,670/t, zinc was flat at $2,314/t, lead was up 1.0% at $2,065/t, tin was down 0.5% at $20,082/t and nickel was down 0.5% at $10,150/t.
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