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The close: Jobs rally fades

Fred Lum/The Globe and Mail

Friday's rally following an upbeat monthly payrolls report from the U.S. Labour Department faded in the afternoon, leaving major indexes relatively unchanged at the end of the day.

The Dow Jones industrial average closed at 13,610.15, up 34.79 points, or 0.3 per cent. The broader S&P 500 closed at 1,460.93, down 0.47 of a point – surrendering earlier gains of nearly 10 points that had sent the benchmark index to its highest level since late 2007. In Canada, the S&P/TSX composite index closed at 12,418.99, down 28.69 points, or 0.2 per cent.

A strong non-farm payrolls report for September had sparked a modest rally early in the day. While U.S. job gains of 114,000 last month were merely in line with expectations, the unemployment rate fell to 7.8 per cent from 8.1 per cent. That was far better than expectations, and it comes as more people find work, as opposed to more people giving up looking for work.

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In Canada, the economy generated 52,000 jobs in September, up from 34,000 jobs the month before. However, the unemployment rate ticked higher, to 7.4 per cent.

Key commodities were weak. Crude oil, which has been whipsawed throughout most of this week, fell to $89.88 (U.S.) a barrel, down $1.83. Gold fell to $1,780.80 an ounce, down $15.70.

Among Canadian commodity producers, Suncor Energy Inc. fell 0.5 per cent and Barrick Gold Corp. fell 0.6 per cent.

Alimentation Couche-Tard Inc. jumped 6.2 per cent in the final hour of trading, following its annual general meeting.

Zynga Inc. fell 11.9 per cent after it again lowered its outlook for 2012 as fewer customers paid for its online games. Facebook Inc., which derives revenue from Zynga, fell 4.7 per cent.

Avon Products Inc. rose 7.2 per cent after Andrea Jung announced that she will step down as chair of the beauty products company, to be replaced by Fred Hassan.

Apple Inc., a member of the S&P 500 but not the Dow, fell 2.1 per cent, which helps to explain the different direction of the two indexes.

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