Wall St. falls as US jobs data muddies Fed rate hike

Wall Street stocks fell Friday after a mixed US jobs report clouded prospects for a Federal Reserve interest rate increase amid China-induced global market turmoil.

The broad-based S&P 500 retreated 29.91 points (1.53 percent) to 1,921.22. The Dow Jones Industrial Average shed 272.38 (1.66 percent) at 16,102.38 and the Nasdaq Composite dropped 49.58 (1.05 percent) to 4,683.92.

The Labor Department reported the economy added fewer jobs than forecast, 173,000, but the previous two months' job gains were revised upward, pushing the unemployment rate down more than expected to 5.1 percent.

It was the last major jobs data before the Fed's policy arm, the Federal Open Market Committee, meets on September 16-17 to consider raising the key federal funds rate for the first time since 2006.

"There is ample ammunition from this job reports both for those that think that rates should be raised at the next Fed meeting, and for those that think they should not," said Michael James at Wedbush Securities.

US equities spent the entire day in the red, joining a pullback overseas that led to sharp losses in major European and Asian markets.

Next Monday's market closures for the Labor Day holiday were seen as a factor in the retreat.

"Ahead of a three-day weekend ... what we see today, I think, is a risk-off mentality, as both China and European weaknesses have dictated our markets' direction for the last week," said James.

All 30 Dow blue chips slid, with 29 of them losing more than one percent. DuPont was the biggest loser, tumbling 3.9 percent.

Financials took a beating, with JPMorgan Chase down 1.9 percent, Goldman Sachs 2.5 percent and American Express 1.6 percent on the Dow, and Bank of America off 1.8 percent.

Industrial conglomerates Caterpillar and General Electric fell 1.8 percent and 2.1 percent, respectively. Boeing had the smallest loss on the Dow, a hair below 1.0 percent.

Tech giant Apple dropped 1.0 percent, while IBM and Microsoft each fell 2.1 percent.

Canadian smartphone maker BlackBerry lost 2.4 percent after announcing it would buy US rival mobile security software provider Good Technology, which is privately held, for $425 million.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.13 percent from 2.16 percent on Thursday, while the 30-year dropped to 2.89 percent from 2.93 percent. Bond prices and yields move inversely.