U.S. equities closed lower in choppy trade on Friday as Wall Street digested a weaker-than-expected employment report and kept an eye on falling oil prices.
"I think that, after a number of days in which oil has risen on expectations of an OPEC deal, some investors are beginning to rethink the likelihood of a deal," said Kate Warne, investment strategist at Edward Jones. "For the past few days, we've seen some intraday volatility, especially in international markets. Given what happened with the pound overnight, I think investors are consolidating some positions."
U.S. crude extended losses around late-morning ET, and settled 63 cents lower at $49.81 per barrel. Gold futures traded slightly higher in afternoon ET, before settling lower and recording its worst week since 2013.
"Crude came off; gold came off; Treasurys came off. I think those reversals in the macro markets certainly spooked investors a little bit," said Jeremy Klein, chief market strategist at FBN Securities, soon after the Dow hit session lows. "It's fairly thin out there. You've got a three-day weekend. The bond guys are off, but we're not."
The S&P 500 closed 0.3 percent lower, with materials falling more than 1.5 percent to lead decliners. The Nasdaq composite fell 0.25 percent lower. The three major indexes had traded higher shortly after the open.
For the week, the three major indexes closed lower, snapping a three-week winning streak. Still, the SPDR S&P Bank ETF (KBE) rose 2.52 this week, marking its best weekly gain since August 5, when it rose 3.02 percent.
SPX week to dateSource: FactSet
The U.S. economy added 156,000 jobs last month and the unemployment rate ticked up to 5.0 percent, the Labor Department said Friday. Economists surveyed by Reuters had expected 176,000 new jobs and the jobless rate to hold at 4.9 percent. The total was a decline from the upwardly revised 167,000 jobs in August (compared to the original number of 151,000).
"It's kind of a good number, and it's not a bad number," said Art Hogan, chief market strategist at Wunderlich Securities. "If you drill down below the headline, did wages go up? Yes. Did hours go up? Yes. Did participation go up? Yes. That's what makes it good. What would've made it great? A number above 200,000."
Average hourly wages pushed higher, rising 6 cents to an annualized rate of 2.6 percent. The average work week also inched up one-tenth to 34.4 hours.
"Looking at the jobs picture, it was a bit disappointing, but I do think that wasn't unexpected," said Chris Benson, senior vice president at Pontoon. He said the labor market tends to slow down in the second half of the year.
"I think it's just enough to keep thing simmering along," said Tom Siomades, head of Hartford Funds Investment Consulting Group. "It's not so strong it puts November on the table, but it's not so bad that it takes December off the table. It's at room temperature, for lack of a better term."