By Sue Chang and Anora Mahmudova, MarketWatch

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

U.S. stocks failed to defend gains Friday, with the S&P 500 ending lower for a ninth straight session in the longest losing streak since December 1980.

The S&P 500 shed 3.48 points, or 0.2%, to close at 2,085.18, falling 1.9% for the week. The streak has been long, but shallow, with the index shedding just a little more than 3% over the nine-day run.

The Dow Jones Industrial Average slid 42.39 points, or 0.2%, to finish at 17,888.28 for a weekly drop of 1.5%. The Nasdaq Composite Index fell 12.04 points, or 0.2%, to end at 5,046.37, also marking a nine-day drop while closing out the week 2.8% lower.

Bill Stone, chief investment strategist at PNC Asset Management Group, blamed election-related uncertainty and potential "headline risk" for the retreat. Oil futures have also been under heavy pressure, with the U.S. benchmark posting a nearly 10% weekly drop.

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."

(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 gave the economy a boost in the third quarter.

Global equity weakness has been tied in part 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 1.7 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.

Read:The stock market is nonpartisan--here is the proof (http://www.marketwatch.com/story/the-stock-market-is-nonpartisanhere-is-the-proof-2016-11-04)

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 still settled 1.3% lower, 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 1.77%.

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.

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Individual movers: Coffee giant Starbucks Corp.'s stock (SBUX) rose 2% 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 6.5% 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 3.6% 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 16:53 ET (20:53 GMT)

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