European Markets Pared Gains After Weak U.S. Jobs Report

(RTTNews) - The European markets were solidly in positive territory early Friday. However, the markets began to pare those gains and dropped into the red after the U.S. jobs report for September came in weaker than expected. The disappointing data has many investors thinking that an interest rate hike by the Federal Reserve later this month is unlikely. That line of thinking has lead investors to speculate that the European Central Bank may need to announce further stimulus measures.

The European markets bounced back into the green in late trade, as U.S. equity markets began to reverse and recover from the lows. The majority of the European markets ended the day with modest gains.

Employment in the U.S. increased by much less than anticipated in the month of September, according to a report released by the Labor Department on Friday. The report said non-farm payroll employment rose by 142,000 jobs in September, well below economist estimates for an increase of about 203,000 jobs.

Meanwhile, the report said the unemployment rate held at a seven-year low of 5.1 percent in September, matching economist estimates.

Eurozone growth is returning, European Central Bank President Mario Draghi said at an event in New York late Thursday.

"The progress achieved over the past three years to stabilize and strengthen the euro area is real," he said. "Growth is returning."

"The way forward is well identified. And we will not rest until our monetary union is complete," he added.

The Euro Stoxx 50 index of eurozone bluechip stocks increased 0.62 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.48 percent.

The DAX of Germany climbed 0.46 percent and the CAC 40 of France rose 0.73 percent. The FTSE of the U.K. gained 0.95 percent, but the SMI of Switzerland finished higher by 0.06 percent.

In Frankfurt, Volkswagen fell 4.29 percent amid a report that California is planning to initiate a separate probe into the emission issue. Daimler was up 0.5 percent, while BMW was marginally lower.

Airline Lufthansa jumped 4.06 percent, after HSBC upgraded its rating to "Buy" from "Hold."

RWE surged 6.83 percent after Societe Generale upgraded the stock to "Hold" from "Sell." E.ON also gained 6.30 percent.

Commerzbank increased 1.11 percent and Deutsche Bank added 0.63 percent.

In Paris, Total climbed 2.17 percent and Technip rose 0.20 percent.

In London, Legal & General has entered into an agreement with the US subsidiary of Royal Philips to provide retirement payments under a group annuity contract to approximately 14,000 of Philips' US retirees and other former employees. The stock gained 2.58 percent.

Experian declined 3.81 percent. T-Mobile US Inc. Thursday said a hacker has stealthily obtained the records of 15 million of its customers by accessing the network server of Experian, the credit-reporting agency that processes T-Mobile's credit applications.

Mining stocks turned in a positive performance due to rising prices for precious metals. Fresnillo advanced 4.80 percent and Randgold Resources added 4.22 percent. Glencore gained 4.37 percent and Antofagasta climbed 1.70 percent.

Eurozone's producer prices declined at a faster-than-expected pace in August, figures from Eurostat showed Friday. The producer price index fell 2.6 percent year-over-year in August, which was worse than the 2.1 percent decrease in July. Economists had expected a 2.4 percent drop for the month.

UK construction activity growth improved sharply in September as output rose at the fastest pace in seven months, led by residential building, prompting firms to add jobs the strongest pace in three months.

The headline seasonally adjusted Markit/CIPS UK Construction Purchasing Managers' Index climbed to 59.9 from 57.3 in August, Markit Economics and the Chartered Institute of Procurement & Supply (CIPS) said Friday. Economists had expected only a modest improvement with an increase to 57.5.

New orders for U.S. manufactured goods fell by more than expected in the month of August, the Commerce Department revealed in a report released on Friday. The Commerce Department said factory orders tumbled by 1.7 percent in August following a downwardly revised 0.2 percent uptick in July.

Economists had expected factory orders to fall by 1.3 percent compared to the 0.4 percent increase originally reported for the previous month.