US open: Stocks decline as investors digest non-farm payrolls

US stocks declined on Thursday as data showed employers added more jobs than forecast in February but wages unexpectedly declined on the month.

The Dow Jones Industrial Average fell 0.06%, the S&P 500 dropped 0.12% and the Nasdaq slid 0.20% at 1513 GMT.

Total non-farm payrolls employment rose 242,000 last month, beating analysts' expectations for a 195,000 increase, the Labor Department revealed. The unemployment rate was unchanged at 4.9% in February, as expected by analysts.

While the non-farms came in better than anticipated, average hourly earnings fell unexpectedly in February by 0.1% on the month to $25.35. Economists had pencilled in a 0.2% month-on-month rise in average hourly earnings in February following a 0.5% gain in January.

On the year, hourly earnings rose 2.2% in February compared to 2.5% year-on-year growth in January and analysts' forecasts for no change.

"As expected, average earnings was the real number to watch in this month’s non-farm payrolls report, where a slowdown in wage growth appears to have taken the edge off an otherwise solid report,” said Ranko Berich, head of market analysis at Monex Europe.

“It’s important to remember, however, that this is just one item of monthly data and the overall picture in the labour market remains solid.”

Chris Williamson, chief economist at Markit, said the upbeat US jobs report raises the possibility that the Federal Reserve will hike interest rates at its 15-16 March policy meeting.

"However, current signs of rising inflationary pressures and a tightening labour market need to be viewed alongside indications that the pace of economic growth may be slowing, and possibly sharply, amid growing concerns about the outlook," he said.

The dollar weakened against main currencies, falling 0.20% versus the pound, 0.59% against the euro and 0.04% versus the yen.

Meanwhile, oil prices gained after official US data showed production fell to its lowest level since November 2014, soothing concerns about the supply glut.

West Texas Intermediate crude rose 0.48% to $37.22 per barrel and Brent increased 0.17% to $34.63 per barrel at 1521 GMT.

On the company front, shares in Big Lots rallied after the retailer’s fourth quarter net income beat expectations.

Staples dropped after the office supplies retailer said it swung to a profit of $86m in the fourth quarter versus a loss of $260m the previous year.

Hewlett-Packard advanced after the company’s first quarter earnings and revenue released late on Thursday surpassed analysts’ forecasts.

Facebook slumped following a media report that the social network is set to pay millions of pounds more in UK tax after a major shake-up of its tax structure.

According to the BBC, profits from the majority of its advertising revenue initiated in Britain will now be taxed in the UK. The company will no longer route sales through Ireland for its largest advertisers, which include Tesco, Sainsbury’s, Unilever and WPP.