By Carla Mozee, MarketWatch

German DAX closes at lowest level since November 2014; euro pulls back from $1.12

European stock markets ended firmly lower on Friday after data showed fewer jobs were added to the U.S. economy in January than economists had expected, feeding into fears that growth in the world's largest economy is slowing and pushing down U.S. stocks.

The Stoxx Europe 600 closed down 0.9% at 325.90, its second-lowest close of the year. For the week, the pan-European benchmark dropped 4.8%, its largest weekly decline since the week ended Jan. 8.

The U.S. Labor Department's employment report (http://www.marketwatch.com/story/us-jobs-growth-slows-to-151000-as-jobless-rate-hits-eight-year-low-2016-02-05) showed nonfarm payrolls rose by a smaller-than-anticipated 151,000 jobs. But the unemployment rate dropped to an eight-year low of 4.9% and average hourly wages surged 0.5% to $25.39 an hour.

The dollar perked up after the report, pushing the euro to an intraday low of $1.1109, according to FactSet. Late Thursday, the euro fetched $1.1211, crossing above $1.12 for the first time since October.

U.S. stocks dropped (http://www.marketwatch.com/story/wall-street-gets-the-jitters-ahead-of-key-jobs-data-2016-02-05), with the Dow Jones Industrial Average losing more than 200 points at one point.

Read:Chicken-little investors, please read the jobs report (http://www.marketwatch.com/story/chicken-little-investors-please-read-the-jobs-report-2016-02-05)

"An important and missing ingredient during 2015 was stronger wage growth so today's upside wage surprise will be positive," Nawaz Ali, a London-based currency strategist at Western Union Business Solutions, wrote in a note.

After the jobs data, "the market will want to know if the two Fed meetings in March and April are still 'live' -- meaning [Federal Reserve] Chair Yellen still sees a chance of a second U.S. rate hike," which would be positive for the dollar, said Ali. If "current market expectations are right, there won't be another hike for a while yet," a negative for the greenback.

Read:Fed likely to stay put in March despite decent jobs report (http://www.marketwatch.com/story/fed-on-hold-in-march-despite-decent-jobs-report-2016-02-05)

   Dollar-sensitive commodities such as oil   and gold  fell as the dollar gained strength. 

But most European oil and gas shares managed to hold gains Friday, with Spanish oil producer Repsol SA (REPYY) and Tullow Oil PLC (TLW.LN) up 3.3% and 4.3%, respectively.

Mining shares were mixed. Iron ore producer Rio Tinto PLC (RIO) (RIO) (RIO) fell, but platinum producer Anglo American PLC (AAL.LN) surged 11%.

The dollar, however, is still in line for a weekly loss after a string of weaker-than-anticipated economic reports. A stronger euro tends to pressure European exporters, and that worrisome sentiment was expressed on Germany's DAX , which slid 5.2% over the week. The index on Friday but closed down 1.1% at 9,286.23, its lowest close since November 2014.

German equity funds saw their biggest outflow since mid-November during the week ended Feb. 3, fund tracker EPFR Global said Friday.

In London, the FTSE 100 also ended lower (http://www.marketwatch.com/story/uk-stocks-wobble-as-miners-lose-hold-on-gains-2016-02-05), down 0.9% to 5,848.06.

Movers: Banking shares have been the source of much of this week's pain after the release of financial updates, although BNP Paribas SA (BNP.FR) shares bucked the losing trend Friday and rose 1.5%. The French lender's fourth-quarter profit was halved, hit by a write-down on its Italian bank. But revenue increased 3% to 10.45 billion euros. Nomura analyst Jon Peace described the results as "reassuringly in line" with expectations (http://www.marketwatch.com/story/bnp-paribas-profit-halved-by-italian-write-down-2016-02-05-34851739).

France's CAC 40 erased 0.7% to 4,200.67, and logged a 4.9% weekly decline.

Near the bottom of the Stoxx 600 was ArcelorMittal SA (MT) (MT). Shares dropped 5.5% as the world's largest steelmaker said it would issue $3 billion worth of shares (http://www.marketwatch.com/story/arcelormittal-to-issue-3-billion-in-shares-2016-02-05) to strengthen its balance sheet. The move is aimed to help the company deal with falling steel prices and global oversupply.

Read:China lays out plan to reduce steel capacity (http://www.marketwatch.com/story/china-lays-out-plan-to-reduce-steel-capacity-2016-02-04)

Investing Insights: A global markets survival guide

If you'll be in London on Tuesday, Feb. 23, you're invited to join us for an evening of cocktails and conversation on the topics of shifting monetary policy, growth, currencies, and the outlook for investing opportunities and risks in European and global markets.

Our panelists for the evening will include MarketWatch Personal Finance and Investing Columnist Robert Powell; Mark Hulbert, Editor of the Hulbert Financial Digest; and Virginie Maisonneuve, Founder and Managing Director of Maisonneuve Global Advisors.

The event is free and open to the public, but reservations are required. For more information or to RSVP for the event, please email (MarketWatchevent@wsj.com)

 

(END) Dow Jones Newswires

February 05, 2016 12:24 ET (17:24 GMT)

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