By Sue Chang and Anora Mahmudova, MarketWatch

U.S. economy adds 161,000 jobs in October

U.S. stocks struggled to hold on to gains Friday as market sentiment remained fragile ahead of Tuesday's presidential election. However, the S&P 500 has a tenuous foothold in positive territory, putting it on track to break its longest losing streak since the depth of the financial crisis.

Modest gains followed eight straight sessions of declines (http://www.marketwatch.com/story/heres-whats-unique-about-sp-500s-longest-losing-streak-in-8-years-2016-11-03) for the U.S. stock benchmark and the Nasdaq as investors fretted over a week of tightening polls.

Trading is "just aimless right now [and] there is noreal trend," said Mike Antonelli, equity sales trader at R.W. Baird & Co. "It looks like sellers don't want to let up."

Bill Stone, chief investment strategist at PNC Asset Management Group, blamed election-related uncertainty for the market's failure to push higher.

Economic data released ahead of Friday's open were mixed, but underlined steady growth and were seen as not impacting the Federal Reserve's view for continued normalization of interest rates.

The U.S. economy added 161,000 jobs in October (http://www.marketwatch.com/story/us-creates-161000-jobs-in-october-2016-11-04), while the unemployment rate fell below 5%.

The payrolls number was below expectations, but was still seen robust enough for the Federal Reserve to consider raising interest rates in December. Market participants see a 71.5% chance of the Federal Reserve tightening policy next month, according to the CME Group's FedWatch tool (http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html).

"The jobs report confirms the existing trend and the trend is positive," said Maris Ogg, president at Tower Bridge Advisors. "The weakness we have seen over the past couple of weeks is partly due to elections that continue to rattle investors' nerves but also due to a correction in the face of high valuations and mediocre earnings."

The S&P 500 rose 2 points, or 0.1%, to 2,090 on the day, though the index was still on track for a second straight weekly loss.

The Dow Jones Industrial Average is up less than a point to 17,931. The Nasdaq Composite Index edged up a point to 5,079, giving it room to end an eight-day slide.

(https://twitter.com/elerianm/status/794524902774579200)

Meanwhile, the trade deficit narrowed (http://www.marketwatch.com/story/us-trade-deficit-sinks-10-to-19-month-low-2016-11-04) in September to a 19-month low, aided by a fourth straight increase in exports that gavethe economy a boost in the third quarter.

Global equity weakness has been tied to Republican presidential nominee Donald Trump's gains against Democratic rival Hillary Clinton in the polls over the past week. He is viewed as more likely to inject uncertainty into domestic and global affairs, and investors generally don't like uncertainty.

Read:Does stock market's 3-month slump point to Trump win or Democratic sweep? (http://www.marketwatch.com/story/does-stock-markets-3-month-slump-point-to-trump-win-or-democratic-sweep-2016-11-03)

Election Day is Tuesday, and Clinton's lead in a RealClearPolitics average of polls (http://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.html) stood at 1.6 points early Friday. That's up from 1.3 points on Thursday, but still down sharply from her mid-October advantage of about 7 points.

On Thursday, the S&P 500 closed 0.4% lower (http://www.marketwatch.com/story/dow-futures-in-holding-pattern-but-facebook-slumps-2016-11-03), finishing in the red for eight sessions in a row, declining by 3% over that period (http://www.marketwatch.com/story/heres-whats-unique-about-sp-500s-longest-losing-streak-in-8-years-2016-11-03) and notching its longest losing streak since October 2008.

Read:Worried about today's market? Take a look at this chart (http://www.marketwatch.com/story/worried-about-todays-market-take-a-look-at-this-chart-2016-11-03)

Other markets:European stocks (http://www.marketwatch.com/story/european-stocks-face-worst-week-in-9-months-rattled-by-political-risk-2016-11-04) added to a weekly loss, while Asian markets closed lower (http://www.marketwatch.com/story/asian-stocks-pull-back-as-overseas-uncertainties-loom-large-2016-11-03). In London, the FTSE 100 slid (http://www.marketwatch.com/story/ftse-100-slides-under-pressure-from-stronger-pound-and-political-angst-2016-11-04) as a stronger pound hit multinationals after a legal blow to Brexit plans (http://www.marketwatch.com/story/brexit-ruling-5-things-you-need-to-know-2016-11-03).

Oil futures (http://www.marketwatch.com/story/oil-prices-rise-slightly-as-production-deal-languishes-2016-11-04) pared earlier losses but were still down more than 1%, as crude producers made little progress on a proposed output cut deal (http://www.marketwatch.com/story/opec-upbeat-on-sealing-oil-output-deal-by-end-of-november-2016-11-04).

Gold futures (http://www.marketwatch.com/story/gold-marooned-as-traders-brace-for-jobs-report-and-presidential-races-final-days-2016-11-04) and the ICE U.S. Dollar Index (http://www.marketwatch.com/story/dollar-rises-but-gains-tempered-amid-us-election-jitters-2016-11-04) were little changed. The yield 10-year Treasury note (http://www.marketwatch.com/story/treasury-yields-slip-ahead-of-october-jobs-report-2016-11-04) fell to 1.78%.

Economic news: The U.S. added 161,000 new jobs in October and the unemployment rate fell below 5% again, reflecting a tight labor market that's forced firms scrambling to fill open positions to increase pay at the fastest pace since 2009.

The U.S. trade gap shrank to $36.4 billion from a revised $40.5 billion in August, the government said Friday.

Atlanta Fed President Dennis Lockhart, who is scheduled to step down in February, said interest rates would stabilize at a lower level than in past expansions after very gradual hikes over the next two years.

Check out:

Individual movers: Coffee giant Starbucks Corp.'s stock (SBUX) rose 2.1% after the company's robust earnings report late Thursday (http://www.marketwatch.com/story/starbucks-rallies-on-robust-earnings-dividend-increase-2016-11-03).

On the downside, camera maker GoPro Inc.(GPRO) sank 9.6% following weaker-than-expected quarterly results (http://www.marketwatch.com/story/gopro-reports-another-loss-40-revenue-drop-2016-11-03-164855732), and Monster Beverage Corp.(MNST) slid 3.3% after its disappointing release (http://www.marketwatch.com/story/monster-beverage-results-disappoint-2016-11-03-174851534).

-- Victor Reklaitis contributed to this report.

(END) Dow Jones Newswires

November 04, 2016 15:38 ET (19:38 GMT)

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