By Michele Maatouk Of DOW JONES NEWSWIRES LONDON (Dow Jones)--European stocks are expected to open lower Friday, following a late selloff on Wall Street, amid caution as investors wait for the U.S. nonfarm payrolls data. Meanwhile, spot gold, the dollar, bond and oil prices were all weaker ahead of the employment report. Ben Potter, research analyst at IG Markets, called London's FTSE 100 index to open down 33 points at 5280, Frankfurt's DAX index 38 points lower at 5732, and the CAC-40 index in Paris 28 points lower at 3771. With no significant euro-zone data scheduled for release, the U.S. nonfarm payrolls figures at 1330 GMT will take center stage, while factory orders at 1500 GMT may also provide some direction. Economists surveyed by Dow Jones Newswires expect the payrolls data to show the U.S. economy lost 125,000 jobs in November, compared with 190,000 in October. The unemployment rate is seen unchanged at 10.2%, its highest level in more than 26 years. "Any overshoot here [on the employment reading] could heap pressure on the downside going into the weekend break, not least as volumes start to dry up as we wind down to Christmas," said Potter. However, should the reading be better than expected, "it could really set the market up for a strong Santa Claus rally." On Wall Street Thursday, the combination of weak service-sector and retail sales data weighed on American Express, Costco and the broader market, causing jitters ahead of Friday's heavily watched payrolls report and contributing to a late-day selloff that pushed the Dow Jones Industrial Average down nearly 100 points. Setting off Thursday's session was news that the Institute for Supply Management's nonmanufacturing index fell to 48.7 in November, from 50.6 in October. A level below 50 hints at a contraction in the economy. Further hurting sentiment, a majority of retailers reported November same-store sales that missed analysts' muted expectations. Even after last year's plunge, the industry as a whole eked out only a slight increase from prior-year levels. Coupled together, the data weighed on trading for much of the session, although the sharpest drop came late. Traders noted that, while the data were a disappointment broadly, the reports were being examined only in the context of Friday's nonfarm payrolls report. Marking its second-straight decline, the DJIA closed the session down 86.53 points, or 0.8%, at 10,366.15. The index was led lower by American Express, off 2.2, or 5.3%, to 38.87, as the company's business model is built around consumer-spending trends. Among other indexes, the Standard & Poor's 500 declined 9.32, or 0.8%, to 1099.92, while the Nasdaq Composite slid 11.89, or 0.5%, to 2173.14. In Asia, stock markets were mostly higher Friday, recouping losses after the late selloff on Wall Street kept many buyers sidelined earlier in the session, while a battle for a slice of Japan Airlines saw that stock take off. Hong Kong's Hang Seng index was down 0.2% but Japan's Nikkei 225 was up 0.5% and China's Shanghai Composite gained 1.6%. Japanese stocks were seesawing between positive and negative territory as profit taking was offset by optimism over yen weakening. "The recent change in the government's stance toward the market is supporting sentiment; another round of buying may start next week, if the yen [slides] further," said SMBC Friend Securities senior strategist Toshihiko Matsuno. Japan Airlines was up 5.4% as speculators bought on the intensifying battle between AMR's American Airlines and Delta Air Lines to acquire a stake in the ailing Japanese carrier. American Airlines said it was prepared to invest $1.1 billion in the ailing Japanese carrier along with private-equity firm TPG, trumping a previous offer by Delta Air Lines. In the European foreign exchanges Friday, the euro was firmer, trading at $1.5075 at 0715 GMT, up from $1.5053 in late New York trade Thursday, while the dollar was weaker at Y88.24, down from Y88.27. Elsewhere, spot gold was at $1210.45 per troy ounce, down $2.00 from the New York close. Nymex January crude oil futures were at $76.26 per barrel, down 20 cents from New York. December bund futures were down 0.02 at 123.34. -By Michele Maatouk, Dow Jones Newswires; +44-20-7842-9447; michele.maatouk@dowjones.com

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