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[NEW YORK] Wall Street stocks closed the week on a positive note thanks to a late-afternoon rally Friday, but a weak US jobs report added to worries that the economy is slowing.
The late surge lifted stocks into positive territory for the week, with the Dow Jones Industrial Average finishing up 157.70 points (0.97 per cent) at 16,472.37.
The broad-based S&P 500 rose 20.02 (1.04 per cent) to 1,951.36, while the tech-rich Nasdaq Composite Index advanced 21.20 (0.45 per cent) to 4,707.78.
The benign tally belied the rising pessimism that the US economy will not escape the ripple effects of a slowing China and a continually sluggish Europe.
Some leading analysts still see US stocks regaining some momentum in the final months of 2015. Goldman Sachs forecasts the S&P 500 will return to 2,000 at the end of the year after suffering its steepest drop in four years in the third quarter.
But analysts expressed alarm over Friday's jobs report. The Labor Department estimated the US economy added just 142,000 jobs in September, well below analyst estimates of 205,000. The government also trimmed its estimates for jobs added in July and August.
The jobs report "would indicate fairly strongly the US economy is slowing more significantly than expected," said Hugh Johnson of Hugh Johnson Advisors.
"The word 'recession' is starting to come into the dialogue." Gregori Volokhine, president of Meeschaert Capital Markets, said the weak jobs report added to other lackluster data points, such as an Institute for Supply Management reading that showed near-flat manufacturing activity in September.
"We are beginning to understand why (Fed Chair) Janet Yellen was scared to raise interest rates" at the September policy meeting, Volokhine said.
Not all of the week's US economic data was bad. The Conference Board's consumer confidence index rose in September to 103.0 from 101.3 the prior month, beating market expectations for a sharp drop in confidence.
In another positive sign, September auto sales from carmakers showed US autos continued to be bought at brisk pace. Lightweight vehicle sales in September jumped 15.8 per cent from a year ago to 1.44 million, lifting the pace of sales to the fastest since July 2005, according to Autodata.
But data outside the US continued to paint a gloomy picture overseas, raising worries of contagion.
China's crucial industrial companies saw profits fall 8.8 per cent in August from a year ago, while eurozone inflation again slipped into negative territory (-0.1 per cent) in September.
"There's a lot of fear in the market," Mr Volokhine said.
In corporate news, Alcoa announced plans to split itself into two companies, one focused on upstream mining and smelting and the other on manufacturing aluminum products to supply industries including aerospace and auto manufacturing.
In other deal news, Energy Transfer Equity said it would acquire the Williams Companies for about US$37.7 billion to create a giant in US oil and gas pipelines, while data-storage company Western Digital announced that Chinese technology company Unisplendour Corporation will pay US$3.78 billion for a 15 per cent stake in the US company.
Ralph Lauren, the 75-year-old founder of his namesake company, announced he would step aside as chief executive and hand over the top executive post to Stefan Larsson, global president of the Old Navy brand for Gap.
Next week's calendar includes a handful of early earnings reports, including PepsiCo, Alcoa and Monsanto.
Key economic reports include the ISM reading of services sector activity for September, US trade data for August and the minutes from the September Federal Reserve monetary policy meeting.