US open: Markets fluctuate following October jobs report

US stocks fluctuated on Friday, as data on non-farm payrolls reported a smaller than expected increase.

Just before 10:00 in New York the Dow Jones Industrial Average was 38.34 points down at 17,512.64 the S&P 500 advanced 3. 69 points to 2,027.52, while the Nasdaq dropped 1.55 points to 4,162.53

US non-farm payrolls increased by a less-than-expected 214,000 in October, missing consensus estimate of 235,000 but the unemployment rated nudged down to 5.8%.

Estimates for September and August were both revised up by a combined 31,000.

About 256,000 jobs were added in September, up from the initial estimate of 248,000, while August's reading was revised up to 203,000 from 180,000.

The revisions mean that the US economy has now increased non-farm employment by 200,000 or more for nine consecutive months, a feat not achieved since 1994. The jobless rate unexpectedly fell from 5.9% in September, while the labour-force participation rate inched up to 62.8% from 62.7%.

Paul Answorth, chief economist at Capital Economics, said that new report suggests the Federal Reserve could hike the interest rates soon.

“The Fed doves could still cling to the news that, despite the decline in the unemployment rate, there is still no sign of a pick -up in average hourly earnings, which increased by a muted 0.1% month-on-month last month,” he said.

“The immediate post-announcement rally in the Treasury market, presumably because the headline payroll figure missed slightly, looks badly misplaced to us. This is a strong report that suggests the first rate hike is coming soon. We expect the Fed to start tightening in March next year.”

In corporate news, Zynga rose sharply in pre-market trade after the online gaming group reported a 12.8% fall in third-quarter revenue that was not as bad as the market had feared.

The firm, however, reported that monthly active users totalled just 112m during the quarter, down from 133m the year before and 331m the year before that.

King Digital Entertainment, famous for its 'Candy Crush' game, soared ahead of the bell after announcing a share repurchase programme and beating third-quarter forecasts.

Salix Pharmaceuticals shares plunged more than 35% in the premarket after the drug and medical-device maker missed profit and revenue estimates, while Capstone Turbine Corp. saw its stock sink 16% in the premarket after reporting a fiscal second-quarter loss of $6.5 million on Friday.

The dollar advanced slightly against the pound but fell against the yen and the euro, while gold futures advanced to $1,148.80.

The yield on the 10-year US Treasury note fell three basis points to 2.36%, while the tield on the 30-year note shed two basis points to 3.02% and the five-year treasuries slid by three basis points to 1.64%.

Brent crude and West Texas Intermediate crude rebounded after a difficult week and were trading at just over $83.5 a barrel and just under $79 a barrel.