EUROPE MARKETS: European Stocks Volatile After U.S. Jobs Data, With Weekly Loss On Deck

By Carla Mozee, MarketWatch

Euro pulls back from $1.12

Stocks across Europe were volatile Friday, as investors sifted through the high-profile U.S. jobs report that resulted in the euro losing ground against the U.S. dollar, but regional equities were still looking at a loss for the week.

The Stoxx Europe 600 was recently off 1 point at 328.61 after flipping between gains and losses in the wake of the January jobs report from the world's largest economy. For the week, however, the index looked solidly in the red, as it is poised to drop 3.8%. That would break two previous weeks of gains.

In a release during Europe's trading day, the U.S. Labor Department's employment report (http://www.marketwatch.com/story/us-jobs-growth-slows-to-151000-as-jobless-rate-hits-eight-year-low-2016-02-05) showed nonfarm payrolls rose by a less-than-anticipated 151,000 jobs. But the unemployment rate dropped to an eight-year low of 4.9% and average hourly wages surged 0.5% to $25.39 an hour.

The dollar perked up after the report, pushing the euro to an intraday low of $1.1113, according to FactSet. Late Thursday, the euro fetched $1.1211, crossing above the $1.12 for the first time since October.

"An important and missing ingredient during 2015 was stronger wage growth so today's upside wage surprise will be positive," Nawaz Ali, a London-based currency strategist at Western Union Business Solutions, wrote in a note.

After the jobs data, "the market will want to know if the two Fed meetings in March and April are still 'live' -- meaning [Federal Reserve] Chair Yellen still sees a chance of a second US rate hike," which would be positive for the dollar, said Ali. If "current market expectations are right .. there won't be another hike for a while yet," a negative for the greenback.

   Dollar-sensitive commodities such as oil   and gold   fell as the dollar gained strength. 

But most European oil and gas shares managed to hold gains Friday, with Spanish oil producer Repsol SA (REPYY) and Tullow Oil PLC (TLW.LN) up 3.4%.

Mining shares were mixed, with iron ore producer Rio Tinto PLC (RIO) (RIO) (RIO) extending losses to 2.8%. Platinum producer Anglo American PLC (AAL.LN) surged 9.3%.

The dollar, however, is still in line for a weekly loss after a string of weaker-than-anticipated economic reports. A stronger euro tends to pressure European exporters, and that worrisome sentiment was expressed on Germany's DAX , which now it faces a 4% weekly drop. The index on Friday swung between gains and losses, most recently edging up 0.1% to 9,407.34.

In London, the FTSE 100 also seesawed (http://www.marketwatch.com/story/uk-stocks-wobble-as-miners-lose-hold-on-gains-2016-02-05).

Movers: Banking shares have been the source of much of this week's pain for the market after the release of financial updates, although BNP Paribas SA (BNP.FR) shares bucked the losing trend Friday and rose 3.5%. The French lender's fourth-quarter profit was halved, hit by a write-down on its Italian bank. But revenue increased 3% to 10.45 billion euros. Nomura analyst Jon Peace described the results as "reassuringly in line" with expectations (http://www.marketwatch.com/story/bnp-paribas-profit-halved-by-italian-write-down-2016-02-05-34851739).

BNP shares were at the top of France's CAC 40 . The index was up 0.2% at 4,237.45, but was still on track for a 4.1% weekly decline.

Near the bottom of the Stoxx 600 was ArcelorMittal SA (MT) (MT). Shares dropped 4.7% as the world's largest steelmaker said it would issue $3 billion worth of shares (http://www.marketwatch.com/story/arcelormittal-to-issue-3-billion-in-shares-2016-02-05) to strengthen its balance sheet. The move is aimed to help the company deal with falling steel prices and global oversupply.

Read:China lays out plan to reduce steel capacity (http://www.marketwatch.com/story/china-lays-out-plan-to-reduce-steel-capacity-2016-02-04)

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(END) Dow Jones Newswires

February 05, 2016 10:39 ET (15:39 GMT)

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