U.S. stocks fell on Friday after weaker-than-expected September jobs report had little effect on the prospects of an interest rate hike by the year end.
U.S. employment growth slowed for the third straight month, with employers adding 156,000 jobs in September. Economists polled by Reuters had expected 175,000.
The rate of unemployment climbed to 5 percent from 4.9 percent in August, though the increase was driven by more Americans rejoining the labor force.
Hourly wages for private sector workers rose 2.6 percent, compared with last year, and were in line with economists’ expectations.
Federal Reserve Chair Janet Yellen has said the economy needs to create less than 100,000 jobs a month to keep up with population growth.
“It’s strong enough that you’re not worried about the U.S. slipping into an economic slump,” said Michael Jones, an investment officer at RiverFront Investment Group in Richmond, Virginia. “But it’s not so strong that it precipitates immediate action from the Fed.”
After the report, traders cut the odds of a November rate increase to 10 percent from 15.5 percent. However, the CME Group’s FedWatch tool showed a 66 percent chance of a move in December.
The dollar .DXY was slightly lower at 96.64, but was on track to record its best week since the Brexit vote in June.
Fed Vice Chairman Stanley Fischer said the jobs report was close to a Goldilocks number, adding that the U.S. economy has been remarkable in reducing unemployment.
At 10:57 a.m. ET (1457 GMT), the Dow Jones Industrial Average .DJI was down 41.84 points, or 0.23 percent, at 18,226.66.
Seven of the 11 major S&P 500 indexes were lower, with materials .SPLRCM falling 1.38 percent and industrials .SPLRCI 1.11 percent.
Financials .SPSY were the top gainers.
Honeywell’s (HON.N) 7.3 percent drop weighed on industrials, after the aero parts supplier lowered the upper end of its 2016 sales and profit forecast range. The stock was also the biggest drag on the S&P 500.