LONDON, Oct 2, (Agencies): Asian, European and US stocks sagged Friday after weak jobs data raised fears that recovery in the world’s largest economy will be more sluggish than expected. Major Asian indexes earlier closed down by 2 percent or more, while on Wall Street the Dow industrials fell 0.2 percent in midday trading New York time. The US Labor Department said the country lost a net total of 263,000 jobs in September, more than the 201,000 shed in August. It is also more than the 180,000 Wall Street was expecting and pushed the unemployment rate up to 9.8 percent from 9.7 percent. The figure weighed on sentiment because it suggests that US consumer spending — which accounts for more than two-thirds of American economic growth and a fifth of the world economy — will remain weak and keep the pace of recovery slow. “It is clear that the labor market remains very weak,” said Paul Dales, economist at Capital Economics. He warned not to interpret too much from one month’s set of figures and said he expected the labor market to improve in coming months. However, a stabilization in job losses would still not be the end of the US economy’s problems. “The next big concern will be falling wage growth,” said Dales. “Earnings growth is likely to continue to fall and may even turn negative, further undermining consumption.” Markets were also watching the Group of 7 meeting of finance ministers from industrialized nations in Istanbul, Turkey, for any comments about the dollar, which has weakened in recent months. “The risk is that the rhetoric on the fringes will continue to try and talk the dollar higher,” said Daragh Maher, analyst at Calyon. He noted that the referendum in Ireland on the Lisbon Treaty — a set of EU reforms held back only by Ireland’s vote — will also be watched closely, with the expected “yes” result likely to give the euro a boost. US US stocks pared early losses and fluctuated in afternoon trading Friday after a disappointing jobs report. The seesaw trade comes after stocks declined in six of the last seven sessions. The Dow Jones industrials have pulled back about 4.5 percent since coming within 82 points of the 10,000 level last week. “Pullbacks are going to constantly be used as opportunities to get into the market,” said Hank Smith, chief investment officer of equity at Haverford Investments in Radnor, Pa. The day’s news added to a recent string of bad indicators for the economy. The Labor Department reported that employers cut 263,000 jobs last month, up from 201,000 in August and worse than the 180,000 losses economists were expecting. The unemployment rate rose to 9.8 percent, in line with forecasts. A surprise decline in factory orders Friday was also troubling. The Commerce Department said factory orders fell 0.8 percent in August following a 1.4 percent gain in July. Analysts had been expecting a 0.7 percent increase. On Thursday, the Dow tumbled more than 200 points after a disappointing report on manufacturing activity from the Institute for Supply Management dealt another blow to optimism that had been emerging about a recovery in the industrial sector. After months of improving data and even small signs of growth, the week’s disappointing reports have led investors to question whether the 50 percent surge in stocks over the past six months can be sustained. “People have had a long, hard week,” said Bruce Shalett, managing partner at Wynston Hill Capital in New York. In early afternoon trading, the Dow Jones industrials rose 10.43, or 0.1 percent, to 9,519.71, after earlier falling as much as 79 points. The Standard & Poor’s 500 index fell 0.13, or 0.01 percent, to 1,029.72, and the Nasdaq composite index rose 1.98, or 0.1 percent, to 2,059.46. About four stocks fell for every three that rose on the New York Stock Exchange, where volume came to 750.3 million shares, compared with 650.8 million at the same time on Thursday. In other trading, the Russell 2000 index of smaller companies gained 0.63, or 0.1 percent, to 584.38 Europe European shares hit a four-week closing low on Friday, after US jobless numbers for September were higher than forecast, casting doubt on the strength of the economic recovery. The FTSEurofirst 300 index of top European shares fell 1.7 percent to a provisional close of 965.15 points, the lowest close since Sept. 4. Over the week, the index fell 1.9 percent. But on Wednesday, it posted its best quarterly gain in nearly 10 years, and is still up more than 49 percent from the lifetime low it hit on March 9. “This is not the turning point. It’s not a break in the primary trend that’s been established since March,” said Mike Lenhoff, strategist at Brewin Dolphin. “We’ve all been expecting bouts of profit taking and I think that’s all it is. The economy can only deliver so much at any one time. Maybe the employment expectations were a bit too rich.” UK Britain’s leading share index shed 1.2 percent on Friday, led by falls from heavyweight banks, miners, and oils after September’s US jobs report fuelled fears that a weak labour market could undermine economic recovery. At the close, the FTSE 100 was 59.11 points lower at 4,988.70, logging a fourth straight session of losses. “The FTSE closed below the psychologically important 5,000 level for the first time in over three weeks and this could also highlight a turning point in the markets,” said Joshua Raymond, Market Strategist at City Index. Banks, which have been at the heart of the financial crisis, were the biggest fallers as nervous investors plumped for less risky plays. Royal Bank of Scotland, Lloyds Banking Group, Barclays, HSBC, and Standard Chartered lost 1.5 to 7.7 percent. Asia Financial markets in South Korea, India and China are closed Friday for holidays. South Korea and Indian markets reopen Monday. China’s markets reopen Oct 9. Japanese stocks stumbled Friday as fresh concerns about the US economy sent the benchmark index to a 10-week low. The Nikkei 225 stock average lost 246.77 points, or 2.5 percent, to 9,731.87 — its lowest close since July 22. The broader Topix index slid 2.4 percent to 874.67. Investors in Japan were just as jittery even after the country’s unemployment rate unexpectedly fell to 5.5 percent in August, down from a record high of 5.7 percent a month earlier. Household spending rose 2.6 percent from a year earlier. With a weak corporate profit outlook, the labor market rebound is likely unsustainable, analysts said. Yen strength added further pressure as the dollar headed toward lower 89-yen levels, far weaker than the average 94.5 yen assumed by most big companies. Exporters were among the day’s biggest casualties. Sharp Corp tumbled 5.3 percent to 944 yen, and Sony Corp shed 5 percent to 2,450 yen. Toyota Motor Corp closed down 3.7 percent at 3,380 yen. Major retailer Seven & i Holdings Co retreated after the convenience store operator said net profit for the six months through August fell 35 percent from a year earlier to 43.7 billion yen ($488 million). Credit Suisse maintained its “neutral” rating on the issue, saying Japanese personal consumption and incomes needs to rise before it can turn more positive on the stock. The latest figures “confirm the tough business conditions faced by the super store and department store segments,” said analyst Dairo Murata. Hong Kong’s Hang Seng lost 579.96, or 2.8 percent, to 20,375.49 after being closed Thursday for a national holiday. Elsewhere, Taiwan’s index shed 1.8 percent, Australia’s market lost 2.1 percent and Indonesia’s benchmark was down 0.2 percent. Oil Oil prices tumbled Friday as unemployment hit a 26-year high, sowing more doubts about the strength of the economic recovery and crude demand. Benchmark crude for November delivery was down $1.14 a barrel at $69.68 on the New York Mercantile Exchange. The contract added 21 cents to settle at $70.82 on Thursday. Prices fell as low at $68.32 Friday morning. Heating oil and gasoline prices also fell. Natural gas, which fell 8 percent Thursday after the government reported consumption has dropped so low that the US is now storing more than at any other time on record, added 17.43 cents at $4.640 per 1,000 cubic feet. Crude has about doubled in price since February, pulled higher in part by the hope that the economy is coming back from the worst recession since World War II, a six-month rally on Wall Street and a battered dollar. But the jobs figure and recent reports on manufacturing show the economy is still weak. The Commerce Department on Friday said that new orders to US factories fell in August by the largest amount in five months. The 0.8 percent drop was much worse than the 0.7 percent that economists expected. In other Nymex trading, heating oil fell 3.77 cents to $1.7897 a gallon. Gasoline for November delivery dropped 2.87 cents to $1.7292 a gallon. In London, Brent crude fell $1.41 to $67.78 on the ICE Futures exchange. Currencies The dollar fell against the euro and yen on Friday as investors digested disappointing US jobs data and European countries urged the United States to support the flagging greenback. The payrolls data are the “fear factor” for the market, Barclays Capital analysts wrote in a note to clients. The European single currency rose to $1.4590, after briefly sinking beneath $1.45, from $1.4543 late in New York on Thursday. The dollar dropped to 89.11 yen from 89.61 yen on Thursday. Traders were also eyeing a meeting of finance chiefs from the Group of Seven major industrialised nations (G7) this weekend, due to discuss the state of the global economy and financial market stability. European finance chiefs stepped up calls on Friday for the United States to prevent fresh falls in the value of the dollar, on the eve of G7 talks. “Everyone needs a strong dollar,” said French Finance Minister Christine Lagarde. She said she was “delighted” at comments made by US Treasury chief Timothy Geithner on Thursday, in which he said: “A strong dollar is very important to this country, I mean that, and it’s very important that people recognise it.” But the Europeans are looking for a solid rise in the value of the dollar, amid suspicions that Washington had been happy to see it fall so as to boost US exports — and fears Europe’s own exports would suffer amid tentative recovery. Meanwhile Japan’s Finance Minister Hirohisa Fujii said he would not raise at the G7 the issue of the yen’s recent strength, which is hurting Japanese exporters. The Japanese currency hit an eight-month high early this week of 88.25 to the dollar, its highest since late January. In London on Friday, the euro was changing hands at $1.4590 against $1.4543 late on Thursday, at 130.24 yen (130.34), 0.9195 pounds (0.9115) and 1.5101 Swiss francs (1.5139). The dollar stood at 89.11 yen (89.61) and 1.0330 Swiss francs (1.0408). The pound was at $1.5898 (1.5951).

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