Stocks decline on mixed jobs report

It’s an old adage that investors hate uncertainty. Unfortunately for them, they got more of it Friday.

The stock market has been volatile for weeks on concern that China’s economy is slowing more rapidly than previously thought. But investors have also had to contend with uncertainty about the outlook for interest rates.

Investors had been hoping that the government’s August jobs report would give them more clarity on interest rates before a key Federal Reserve meeting this month. However, a mixed report left them guessing whether policymakers will feel confident enough about the strength of the U. S. economy to raise interest rates from historic lows.

The report showed that the U. S. unemployment rate fell to a seven- year low in August, but also that employers added fewer jobs than forecast.

“It’s interesting and disappointing that today’s data didn’t provide us with that ‘ Ah- ha!’ clarity that everyone is seeking,” said Michael Arone, chief investment strategist at State Street Global Advisors.

The Dow Jones industrial average fell 272.38 points, or 1.7%, to 16,102.38. The Standard & Poor’s 500 index gave up 29.91 points, or 1.5%, to 1,921.22. The Nasdaq composite slipped 49.58 points, or1.1%, to 4,683.92.

Fed policymakers have kept their benchmark interest rate close to zero since late 2008 to help revive the economy after the Great Recession. Those low rates have also been good for the stock market, supporting a bull run that has lasted for more than six years.

The S& P 500 ended the week down 3.4%, its secondworst weekly drop of the year. The index is down nearly 10% from its peak of 2,130.82 reached May 21.

Much of the damage this week was done Tuesday, after gloomy manufacturing data out of China rekindled fears about the health of the world’s second- largest economy.

But despite the big drop in stocks, some strategists say that much of the evidence suggests that the U. S. economy is maintaining its recovery.

“As China is sneezing, there is very little to suggest that the U. S. is catching a cold,” said Jeremy Zirin, chief U. S. equity strategist for Wealth Management Research at UBS.

Among individual stocks, Netflix continued its slide. The company’s stock closed the week down 16% on speculation that competition from rivals including Amazon and Hulu is intensifying. Apple also is exploring amove into original programming.

Bond prices edged up after the jobs report, pushing the yield on the benchmark 10- year Treasury note down to 2.13% from 2.16% on Thursday.

In Europe, the FTSE 100 index of leading British shares was down 2.4%, Germany’s DAX fell 2.7%. The CAC- 40 in France was 2.8% lower.

The euro edged up to $ 1.1151. The dollar fell 1% against the Japanese currency, to118.99 yen.