U.S. stocks traded water on Friday as underwhelming jobs data rounded off a week of mixed economic signals about the domestic economy, while a new stimulus plan from China helped ease some concerns around global growth.
Global markets inched higher after China’s central bank said it would slash the amount of cash that banks must hold as reserves, releasing a total of 900 billion yuan ($126.35 billion) in liquidity.
Slower-than-expected payroll growth in August hinted at a slowing U.S. economy, helping cement expectations of an interest rate cut by the Federal Reserve later this month.
The Labor Department’s nonfarm payroll data showed that the economy added 130,000 jobs in August, below expectations of a gain of 158,000, according to a Reuters survey of economists.
However, average hourly earnings gained 0.4% last month, the largest increase since February, raising hopes that healthy consumer spending could put inflation on track to meet the Fed’s target.
“It was generally a weak report. The U.S. labor market has been the last line of defense amid softening global economic data,” said Bill Merz, head of fixed income research at U.S. Bank Wealth Management in Minneapolis.
“We can’t read too much into any single report, but this is one more piece of evidence that the Fed is behind the curve.”
Market participants will keep a close watch on Fed Chairman Jerome Powell’s speech at the University of Zurich later on Friday for clues on monetary policy. They currently expect a quarter percentage point cut at the Fed’s mid-September meeting.
Although U.S. markets kicked off the week on the back foot on poor August factory data, they were on track to end higher after being boosted by diffusing political tensions in Hong Kong and hopes of a de-escalation in U.S.-China trade tensions.
Strong growth in August private payrolls and an accelerating services sector also helped boost stocks to one-month highs later in the week. The benchmark S&P 500 rose 1.3% on Thursday and is now just 1.5% shy of its record high from July.
The communication services sector .SPLRCL was the biggest drag among the 11 major S&P sectors, pulled lower by Facebook Inc, which fell 1.7% after several U.S. state attorneys general said they would investigate the social media giant on whether it stifled competition and put users at risk.
A drop in oil prices also pressured energy stocks .SPNY, which fell 0.25%, leading losses on the S&P.
At 10:54 a.m. ET the Dow Jones Industrial Average was up 80.04 points, or 0.30%, at 26,808.19, the S&P 500 was up 7.22 points, or 0.24%, at 2,983.22 and the Nasdaq Composite was up 16.94 points, or 0.21%, at 8,133.77.
Among stocks, Marathon Oil was down about 2% after Goldman Sachs cut its price target on the stock.
Advancing issues outnumbered decliners by a 1.96-to-1 ratio on the NYSE and a 1.76-to-1 ratio on the Nasdaq.
The S&P index recorded 42 new 52-week highs and no new lows, while the Nasdaq recorded 42 new highs and 25 new lows.