Stocks gain as US employment jumps but services sector slows

Stocks rose strongly on Friday. The S&P 500 gained 1.1 percent and the STOXX Europe 600 rose 1.0 percent.

A strong US employment report on Friday helped boost stocks. The Labor Department reported that non-farm payrolls rose 248,000 in September while the unemployment rate fell to 5.9 percent, the lowest level since July 2008, from 6.1 percent in August.

Another report on Friday showed that the US trade deficit shrank 0.5 percent in August but a report from the Institute for Supply Management showed that its non-manufacturing index fell to 58.6 in September from 59.6 in August.

The US services sector slowdown was confirmed by Markit, whose index for the sector also fell to 58.9 in September from 59.5 in August, pushing the composite PMI down to 59.0 from 59.7.

The eurozone services sector also slowed in September. A report from Markit on Friday showed that its services PMI for the region fell to 52.4 last month from 53.1 in August, pushing the composite index down to 52.0 from 52.5.

More encouragingly, another report on Friday showed that eurozone retail sales jumped 1.2 percent in August, rebounding from a 0.4 percent fall in July.

Elsewhere in Europe, the Markit/CIPS services PMI for the UK fell to 58.7 in September from 60.5 in August. The composite fell to 58.1 from 59.7.

In China, the National Bureau of Statistics reported on Friday that its non-manufacturing PMI fell to 54.0 in September from 54.4 in August.

In contrast, Japan's services sector moved back into expansion as Markit's services PMI jumped to 52.5 in September from 49.9 in August. That helped push the composite index up to 52.8 from 50.8.