S&P 500 ends slightly lower after US September jobs miss growth expectation

The S&P 500 ended lower on Friday after data showed weaker jobs growth than expected in September, yet investors still expected the Federal Reserve to begin tapering asset purchases this year.

Wall Street's three main indexes were mixed for much of the session before losing ground toward the end. All three indexes posted weekly gains.

Comcast Corp tumbled after Wells Fargo cut its price target on the media company, while Charter Communications Inc fell after Wells Fargo downgraded that cable operator to "underweight" from "overweight".

Both companies were among the biggest drags on the S&P 500 and Nasdaq.

Real estate and utilities were the poorest performers among 11 S&P 500 sector indexes, down 1.1 per cent and 0.7 per cent, respectively.

The S&P 500 energy sector index jumped 3.1 per cent, with oil up more than 4 per cent on the week as a global energy crunch has boosted prices to their highest since 2014.

Chevron and Exxon Mobil rallied more than 2 per cent and were among the companies giving the S&P 500 the greatest lift.

The Labor Department's nonfarm payrolls report showed the US economy in September created the fewest jobs in nine months as hiring dropped at schools and some businesses were short of workers. The unemployment rate fell to 4.8 per cent from 5.2 per cent in August and average hourly earnings rose 0.6 per cent, which was more than expected.

“I think that the Federal Reserve made it very clear that they don’t need a blockbuster jobs report to taper in November," said Kathy Lien, Managing Director at BK Asset Management in New York. "I think the Fed remains on track.”

Futures on the federal funds rate priced in a quarter-point tightening by the Federal Reserve by November or December next year.

The Dow Jones Industrial Average dipped 0.03 per cent to end at 34,746.25 points, while the S&P 500 lost 0.19 per cent to 4,391.35.

The Nasdaq Composite dropped 0.51 per cent to 14,579.54.

For the week, the S&P 500 rose 0.8 per cent, the Dow added 1.2 per cent and the Nasdaq gained 0.1 per cent.

Third-quarter reporting season kicks off next week, with JPMorgan Chase and other big banks among the first to post results. Investors are focused on global supply chain problems and labour shortages.

Analysts on average expect S&P 500 earnings per share for the quarter to be up almost 30 per cent, according to Refinitiv.

"I think it’s going to be a dicey earnings season," warned Liz Young, head of investment strategy at SoFi in New York. "If supply-chain issues are driving up costs, a company with strong pricing power can pass through those rising costs. But you can’t pass through a labor shortage if you can’t find workers to hire."

Declining issues outnumbered advancing ones on the NYSE by a 1.24-to-1 ratio; on Nasdaq, a 1.52-to-1 ratio favored decliners.

The S&P 500 posted 26 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 86 new highs and 113 new lows.

Volume on US exchanges was 9.2 billion shares, compared with the 11 billion average over the last 20 trading days.

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