Markets

European Stocks Close Lower as U.S. Jobs Data Disappoints

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  • Euro zone business activity remained robust in August despite the impact of the Delta variant of Covid-19 and broad supply chain problems, according to Friday's PMI readings.
  • U.S. nonfarm payrolls increased by just 235,000 across the month of August, well short of the 720,000 new hires projected by economists surveyed by Dow Jones.

LONDON — European markets closed lower on Friday as investors reacted to key economic indicators out of the euro zone and the U.S.

The pan-European Stoxx 600 provisionally closed 2.58% down, with basic resources adding 2.32% while travel and leisure stocks slid 2.33%.

Shares in Asia-Pacific were mostly higher on Friday, with Chinese stocks declining over concerns about slowing growth, while Japanese markets surged after Prime Minister Yoshihide Suga said he will not be running in the upcoming leadership election.

Stateside, stock futures fell at the open after a hugely disappointing August jobs report from the U.S. Labor Department. Nonfarm payrolls increased by just 235,000 across the month, well short of the 720,000 new hires projected by economists surveyed by Dow Jones.

The Dow Jones Industrial Average fell about 107 points, or 0.3%. The S&P 500 was slightly negative, while the tech-heavy Nasdaq Composite rose about 0.2%.

The reading could have an impact on the Federal Reserve's policymaking decisions with regards to scaling back its monetary stimulus program.

The S&P 500 and Nasdaq both climbed to record highs Thursday on the back of better-than-expected weekly jobless claims figures.

Back in Europe, euro zone business activity remained robust in August despite the impact of the Delta variant of Covid-19 and broad supply chain problems. The final IHS Markit composite PMI (purchasing managers' index) reading for the bloc dropped to 59.0 from July's 15-year high of 60.2, remaining well clear of the 50 mark that separates expansion from contraction.

German polling on Thursday showed the Social Democrats opening up a five-point lead over Chancellor Angela Merkel's Christian Democratic Union in the run-in to the Sept. 26 national election in Europe's largest economy.

In terms of individual share price movement, Allfunds Group jumped 11.6% to lead the Stoxx 600 after strong first-half results, while at the bottom of the index, Ocado slid 4%.

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