Stocks rise as tepid jobs report stokes hopes for low rates

USA stock-market index futures climbed after the closely watched jobs report came in weaker than Wall Street's consensus estimates, making an interest-rate hike a less likely scenario for the Federal Reserve at its next meeting in September.

LONDON (AP) — Stock rose and the dollar fell on Friday after a key report showed the USA economy added slightly fewer jobs than expected in August, making it potentially less likely that the Federal Reserve will raise interest rates already this month.

Nasdaq 100 e-minis were up 8.25 points, or 0.17 percent, on volume of 14,402 contracts. But most investors didn't expect rates to rise this month, and the jobs report appeared to confirm rates won't go up right now.

Given the weak ISM manufacturing report, markets will look to Friday's payrolls to see if the Fed can risk raising rates this month or later this year.

USA employers have added jobs at a 182,000 monthly pace so far this year.

Economists had forecast payrolls increasing 180,000 last month and the unemployment rate slipping one-tenth of a percentage point to 4.8 percent.

The dollar had surged against its peers following a relatively hawkish speech by Fed Chair Janet Yellen last Friday, which revived expectations the USA central bank was moving closer to a hike. Average hourly earnings rose 0.1% when a gain of 0.2% was forecast.

The US labor market disappointed in August.

The slight disappointment in the August report has many market watchers anticipating that the Federal Reserve will hold off on another interest rate hike at its September meeting. After this mildly disappointing August print, a rate hike in September is less likely but it's still on the table. "What the Fed doesn't want is to be playing catch-up and having to hike more sharply, which could leave the economy looking vulnerable", said Bullus.

Commodities including oil and copper, priced in dollars, rose.

Still, the payrolls gain added to July consumer spending, residential construction and durable goods orders in suggesting a pickup in economic growth after output rose 1.0 percent in the first half of the year. Colgate-Palmolive, which makes toothpastes, soaps, and pet foods, rose 77 cents, or 1 percent, to $75.04.

US government bonds were relatively steady Friday, with the yield on the benchmark 10-year Treasury note at 1.597%, compared with 1.577% just before the report was released.

Marathon Oil rose 3.5 percent.

Boeing topped the gainers among the Dow blue chips, adding 1 per cent, while Nike was the biggest loser, off 0.9 per cent.

CURRENCIES: The dollar strengthened to 103.47 yen from 103.26 yen in late trading Thursday.

ASIA'S DAY: Japan's benchmark Nikkei 225 index finished practically unchanged at 16,925.68 while South Korea's Kospi edged 0.3 percent higher to 2,038.31.

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