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The S&P 500 ended slightly lower on Friday after data showed weaker jobs growth than expected in September, yet investors still expected the Federal Reserve to begin tapering asset purchases this year.

Canada’s main stock index closed essentially unchanged even as crude oil prices surpassed US$80 for the first time in seven years and a strong September jobs report saw employment return to pre-pandemic levels for the first time.

The S&P/TSX Composite index fell near the end of trading to gain just one-tenth of a point on the day to 20,416.31. The energy sector rose 1.78%.

The Composite was up 1.3% for the week after four straight weeks of losses.

“Guys are buying the dip which has been the thing to do for the last while,” said Steve Palmer, chief investment officer at AlphaNorth Asset Management.

“We are approaching a seasonally strong period for equities,” Palmer said. “Once we get out of the September-October period, things are going to resume the uptrend.”

The Toronto market has gained 17.1% so far this year, helped by hopes of economic recovery. Those hopes were lifted on Friday by data showing the Canadian economy posted a monster gain of 157,000 jobs in September.

Adding to support for the TSX this year has been a rally in oil prices. U.S. crude oil futures settled 1.3% higher at $79.35 a barrel on Friday, while energy shares traded at their highest level since May 2019.

Heavily-weighted financials advanced 0.6%, while technology ended nearly 2% lower.

One of the biggest decliners was Dye & Durham Ltd. It lost 5.8% after the company said it would not opt for any strategic changes including a sale, putting an end to the software maker’s strategic review started in response to a management-led buyout offer.

Wall Street’s three main indexes were mixed for much of the session before losing ground toward the end. All three indexes posted weekly gains.

Comcast Corp tumbled after Wells Fargo cut its price target on the media company, while Charter Communications Inc fell after Wells Fargo downgraded that cable operator to “underweight” from “overweight.”

Both companies were among the biggest drags on the S&P 500 and Nasdaq.

Real estate and utilities were the poorest performers among 11 S&P 500 sector indexes, down 1.1% and 0.7%, respectively.

The S&P 500 energy sector index jumped 3.1%, with oil up more than 4% on the week as a global energy crunch has boosted prices to their highest since 2014.

Chevron and Exxon Mobil rallied more than 2% and were among the companies giving the S&P 500 the greatest lift.

The Labor Department’s nonfarm payrolls report showed the U.S. economy in September created the fewest jobs in nine months as hiring dropped at schools and some businesses were short of workers. The unemployment rate fell to 4.8% from 5.2% in August and average hourly earnings rose 0.6%, which was more than expected.

“I think that the Federal Reserve made it very clear that they don’t need a blockbuster jobs report to taper in November,” said Kathy Lien, Managing Director at BK Asset Management in New York. “I think the Fed remains on track.”

Futures on the federal funds rate priced in a quarter-point tightening by the Federal Reserve by November or December next year.

The Dow Jones Industrial Average dipped 0.03% to end at 34,746.25 points, while the S&P 500 lost 0.19% to 4,391.35.

The Nasdaq Composite dropped 0.51% to 14,579.54.

For the week, the S&P 500 rose 0.8%, the Dow added 1.2% and the Nasdaq gained 0.1%.

Third-quarter reporting season kicks off next week, with JPMorgan Chase and other big banks among the first to post results. Investors are focused on global supply chain problems and labor shortages.

Analysts on average expect S&P 500 earnings per share for the quarter to be up almost 30%, according to Refinitiv.

“I think it’s going to be a dicey earnings season,” warned Liz Young, head of investment strategy at SoFi in New York. “If supply-chain issues are driving up costs, a company with strong pricing power can pass through those rising costs. But you can’t pass through a labor shortage if you can’t find workers to hire.”

Declining issues outnumbered advancing ones on the NYSE by a 1.24-to-1 ratio; on Nasdaq, a 1.52-to-1 ratio favored decliners. The S&P 500 posted 26 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 86 new highs and 113 new lows. Volume on U.S. exchanges was 9.2 billion shares, compared with the 11 billion average over the last 20 trading days.

Read more: Stocks that saw action Friday - and why

Reuters, The Canadian Press, Globe staff

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