US open: Dow plunges over 200 points as non-farm payrolls rules out October rate hike

LONDON (ShareCast) - (ShareCast News) - US equities slumped early on Friday, after a disappointing non-farm payroll report all but dashed expectations of an October interest rates hike by the Federal reserve Shortly after 1500 BST, the Dow Jones Industrial Average was down 205 points to 16,066.77, while the S&P 500 and the Nasdaq (NasdaqGS: NDAQ - news) were 26 and 61 points higher respectively.

Non-farm payrolls disappoint A report on non-farm payrolls showed 142,000 jobs were added in September, comfortably below the 201,000 reading analysts had estimated.

Furthermore, revisions to the prior month´s data revealed 136,000 jobs were added, down from a preliminary estimate of 173,000.

"While it's always important not to over-react to one single data release, we'll make an exception in this case," said Paul Ashworth, chief US economist at Capital Economics. "The chances of a rate hike by the Fed this year just went way down." The unemployment rate was unchanged at 5.1%, as expected and average weekly earnings were flat in comparison with August, coming in below the 0.2% rise which analysts had anticipated.

Meanwhile, according to figures released by the Commerce Department, factory orders declined 1.7% in August compared with analysts' expectations for a 1.3% drop.

July's figures were downwardly revised to show a 0.2% increase compared with the 0.4% rise that was initially reported.

Elsewhere, the ISM manufacturing for the New York area tumbled from 51.1 to 44.5.

Fed speakers Boston Fed President Eric Rosengren will be on stage at 1330 BST, followed by Minneapolis Fed President Narayana Kocherlakota and Cleveland Fed President Loretta Mester , who will appear on separate panels at 1400 BST and 1600 BST respectively.

Fed Vice Chairman Stanley Fischer will also appear at the same event and is scheduled to speak at 1830 BST.

Elsewhere, Asian stocks ended the week on a mixed note, as investors remained concerns the Chinese economy might slowdown, despite the slightly better-than-expected manufacturing data released on Thursday.

European stocks advanced, while oil prices fell, with both West Texas Intermediate and Brent losing 1.1% to $44.29 and $47.17 a barrel respectively.

The dollar lost 0.45% against the pound, tumbling 0.59% and 0.88% respectively against the yen and the euro, while gold futures surged 2.46% to $1,141.02.

In company news, Advanced Micro Devices (NasdaqCM: AMD - news) climbed 1.16% after saying on Thursday it will cut 5% of its workforce as part of its restructuring plan.

FedEx (Swiss: FDX.SW - news) slid 1.53% after the Wall Street Journal reported the delivery giant has encountered difficulties in its proposed takeover of Dutch rival TNT Express.