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Weakness in job market sends bond prices higher and briefly pulls stocks lower; dollar slips


NEW YORK — A weak report on the U.S. jobs market pushed bond prices up and the dollar lower on Friday. After an initial dive, the stock market turned higher in the afternoon, as traders anticipated that the slowdown in hiring would keep the Federal Reserve from raising a key interest rate off a record low.

KEEPING SCORE: The Standard & Poor's 500 index was up 10 points, or 0.5 percent, to 1,934, as of 1:20 p.m. Eastern time. The Dow Jones industrial average rose 83 points, or 0.5 percent, to 16,356, while the Nasdaq composite gained 33 points, or 0.7 percent, to 4,660.

WAY OFF: The government reported that employers added 142,000 workers last month, much lower than the 200,000 anticipated on Wall Street, and hired fewer people in July and August than previously thought. The unemployment rate stayed at 5.1 percent, but only because many Americans have stopped looking for work so no longer counted as unemployed.

NO SPIN: "There's just no positive spin you can put on it," said Russ Koesterich, BlackRock's global chief investment strategist. "Combined with other reports, it really raises questions about the strength of the recovery."

FED: The report raised doubts that the Fed will start raising interest rates before the end of the year. The Fed has only two meetings left: one later this month and another in December. Until Friday morning, many investors thought the first increase would come soon. Record low rates have helped power the stock market's strong run since the financial crisis.

"We see almost no way the Fed can raise rates at its October meeting," said Dan Greenhaus, chief strategist at the brokerage BTIG in New York, in a note to clients. "As a result of this report, investors should rightly be debating whether the Fed can or should raise rates at its December meeting."

PHOTO: Trader Jeffrey Vazquez works on the floor of the New York Stock Exchange, Friday, Oct. 2, 2015. A weak report on the U.S. jobs market is sending the stock market and the dollar sharply lower in early trading. (AP Photo/Richard Drew)
Trader Jeffrey Vazquez works on the floor of the New York Stock Exchange, Friday, Oct. 2, 2015. A weak report on the U.S. jobs market is sending the stock market and the dollar sharply lower in early trading. (AP Photo/Richard Drew)

BATTERED BANKS: Financial firms in the S&P 500 sank 1 percent, by far the biggest loss among the index's 10 industry groups. Record-low interest rates pinch the profits banks make from lending money. JPMorgan Chase fell 68 cents, or 1 percent, to $60.29, and Bank of America fell 32 cents, or 2 percent, to $15.24.

NORDY NEWS: Nordstrom climbed after announcing that it will pay a special dividend and spend up to $1 billion buying its own shares. The department-store chain gained $1.35, or 2 percent, to $72.76.

HACKED: T-Mobile sank on news that hackers had broken into a credit agency's network and stolen information on 15 million T-Mobile customers. The company's stock dropped 60 cents, or 2 percent, to $39.53.

OTHER SIDE OF ATLANTIC: In Europe, major indexes finished slightly higher. Germany's DAX rose 0.5 percent, France's CAC-40 rose 0.7 percent, and Britain's FTSE 100 added 0.9 percent.

CRUDE: Benchmark U.S. crude oil dropped 14 cents to $44.59 a barrel on the New York Mercantile Exchange. Brent Crude, a benchmark for international oils, fell 27 cents to $48.12 a barrel in London.

BONDS AND DOLLARS: U.S. government bond prices jumped, driving the yield on the 10-year down to 1.98 percent, a steep drop from 2.04 percent late Thursday. It went as low as 1.91 percent, its lowest level since April. The euro rose 0.3 percent to $1.1222 and the dollar slipped to 119.82 yen.

ASIA'S SCORECARD: Markets in the region drifted, with Japan's Nikkei 225 rising less than 0.1 percent. South Korea's Kospi slipped 0.5 percent. Hong Kong's Hang Seng rebounded after a holiday, jumping 3.2 percent. Australia's S&P/ASX 200 lost 1.2 percent to 5,052.00. Markets on mainland China remain closed for holidays until Oct. 8.

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