US open: Dow plunges over 200 points as jobs report misses forecast

US stocks fell on Friday, after a monthly job report showed the US economy added less jobs than expected last month.

Just before 1500 BST, the Dow Jones Industrial Average was down 211 points to 116,163.31, while the S&P 500 and the Nasdaq were 21 and 39 points lower respectively.

Friday data

The US economy added 173,000 jobs in August, data released on Friday by the Labor Department showed.

The figure was the smallest gain in five months and fell way short of the 215,000 figure analysts had expected.

The unemployment rate fell to 5.1% from 5.3% to reach its lowest level since April 2008, while employment gains for July and June were revised up by a combined 44,000.

The report, the last major data release before next week's meeting of the Federal Reserve, was eagerly awaited by investors looking for clues over the timing of the first interest rates hike but left analysts unimpressed.

“A bumper payrolls number would have sealed the case for higher interest rates in many people minds, while a low number would have dealt a blow to any chances of tightening of policy at the next meeting. Instead, we had something in the middle," said Markit's chief economist Chris Williamson.

"Dig deeper and the labour market report should in fact add to rate rise odds, but recent financial market volatility and growth jitters in China mean it would be seen by many to be a risky move to start hiking rates any time soon."

Meanwhile, some economists added that regardless of whether the US central bank will go ahead with a lift-off this month or not, interest rates will not remain at near-zero for much longer.

"Even if the Fed doesn’t hike rates in September, it won’t leave rates at near-zero for much longer given that it either has -or is close to - fulfilling the full employment part of its dual mandate," said Paul Ashworth, chief US economist at Capital Economics.

"Fed officials are still fairly confident that shrinking slack means that inflation will rebound over the next year or two.

"Next year we expect core inflation to surprise on the upside, forcing the Fed into raising interest rates more aggressively than the markets currently anticipate."

Asian markets slide

Elsewhere, equity markets fell across the board in Asia, as Hong Kong’s Hang Seng Index and Japan’s Nikkei Stock Average both reversed earlier gains to close down 0.45% and 2.15% respectively, while European stocks declined.

The dollar was broadly stable against the euro, but fell 0.69% against the yen and gained 0.36% against the pound.

Gold futures slid 0.40% to $1,120 an ounce, while oil prices edged lower, with West Texas Intermediate losing 0.43% to $46.55, while Brent dropped 0.38% to $50.49 a barrel.

In company news, Netflix fell 1.71% as investors remained wary about increasing competition in the TV streaming market.

The stock was track to decline for the sixth consecutive session.

Twitter edged 0.25% lower and could be in focus, as the social media giant is expected to name a new chief executive, perhaps as early as Friday.

Meanwhile, Amazon shed 1.19%, after saying late on Thursday that it was planning to buy video reformatter Elemental Technologies, as it seeks to add more streaming options to its portfolio.

Smartphone maker Blackberry climbed 4.36% after saying it entered an agreement to acquire security specialist Good Technology for $425m in cash.