Volkswacht Bodensee - Wall Street cools on hot US job data

The latest non-farm payroll report showed the US economy added 336,000 new jobs last month, virtually double what was expected.

That caused Wall Street to sag, the Dow falling almost half of one percent minutes after the opening bell. The tech-heavy NASDAQ and the broader S&P 500 both shed around 0.7 percent.

The Labor Department also revealed unemployment stayed unchanged at 3.8 percent, maintaining pressure on policymakers looking to cool the economy.

"All told, today's jobs report was strong, and the market's initial reaction makes total sense," said Fawad Razaqzada, analyst at StoneX.

"What is not known, however, is the inevitable revisions we will see next month."

The data were "underscoring the Fed's view to keep policy restrictive for longer and raising the possibility for one more rate increase in 2023, slightly," he added.

For Stephen Innes at SPI Asset Management, "at least on the surface, this staggeringly strong NFP beat could be considered unfriendly to risk and will likely continue to exert upward pressure on the dollar".

Innes further warned that "the road to a risk-friendly soft landing has always been narrow".

- Jobs news boosts dollar -

The dollar received a fillip from the jobs news, having struggled Friday before the release of the key data.

Major European indices were just in the green some two hours from the close, though London, Frankfurt and Paris all pared earlier gains of around one percent to 0.2 percent some two hours from the close of the week's trading.

Oil prices recovered slightly from sharp falls over the past week that eased concerns over high inflation.

At the same time, US bond yields hit their highest levels since 2007 this week as investors fear the fallout of high borrowing costs for businesses and consumers.

The Fed has raised its key lending rate 11 times since March 2022, lifting borrowing costs to a 22-year high as it looks to bring inflation down to its long-term target of two percent.

Despite falling sharply over the last 12 months, US inflation remains stubbornly above target, leading most Fed officials to predict that another hike will be needed before year end.

In Europe on Friday, data showed factory orders rose more than expected in its biggest economy Germany during August.

High inflation, elevated energy costs and weaker demand from key market China have all been weighing on Germany's crucial manufacturing sector in recent months.

The country entered recession at the start of 2023, and economic growth stagnated in the second quarter. A slew of weak indicators since then added to fears of a prolonged slowdown.

Elsewhere Friday, the ruble fell further against the dollar, a day after Russian President Vladimir Putin said the sanctions-hit country's economic situation was "stable".

And the Food and Agriculture Organization said global sugar prices had soared to their highest level in almost 13 years in September as the El Nino weather phenomenon hit production in India and Thailand.

- Key figures around 1400 GMT -

New York - Dow: DOWN 0.5 percent at 32,925.67 points

London - FTSE 100: UP 0.2 percent at 7,466.73 points

Frankfurt - DAX: UP 0.2 percent at 15,099.69

Paris - CAC 40: UP 0.2 percent at 7,010.20

EURO STOXX 50: UP 0.5 percent at 4,118.65

Tokyo - Nikkei 225: DOWN 0.3 percent at 30,994.67 (close)

Hong Kong - Hang Seng Index: UP 1.6 percent at 17,485.98 (close)

Shanghai - Composite: Closed for a holiday

Euro/dollar: DOWN at $1.0509 from $1.0534 on Thursday

Pound/dollar: DOWN at $1.2148 from $1.2168

Dollar/yen: UP at 149.38 yen from 148.97 yen

Euro/pound: DOWN at 86.52 pence from 86.57 pence

Brent North Sea crude: UP 0.8 percent at $84.71 per barrel

West Texas Intermediate: UP 0.6 percent at $82.93 per barrel

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T.Ziegler--VB