UKX FTSE 100 Index

By Carla Mozee and Sara Sjolin, MarketWatch

European stock markets ended a choppy session mostly lower on Friday, with a downbeat reading on U.S. jobs growth outweighing a late-day rally in oil prices.

The Stoxx Europe 600 fell 0.4% to close at 331.67, ending down 2.9% for the week--marking the worst weekly performance for the pan-European benchmark since the week ended Feb. 12, FactSet data showed.

Big U.S. jobs miss: European stocks already were lower from the beginning of the trading day, but losses sharpened after the weaker-than-expected jobs number from the U.S.

The nonfarm-payrolls report showed 160,000 jobs were added to the economy last month, missing forecasts of growth of 203,000 jobs.

However, in a bit of good news, average hourly earnings climbed 2.5% in the past 12 months, a touch better than expectations.

"The headline job number is not only 40,000 below the median expectations, but it should finally put this ongoing idea around a possible U.S. rate rise in June to bed, and the only reason why it has not completely as of yet is because average earnings were announced at a robust 2.5%," said FXTM chief market analyst Jameel Ahmad in a note.

The U.S. Federal Reserve closely monitors developments in the labor market when setting monetary policy. Ahead of Friday's jobs report, analysts were hinging the June rate decision on how strong the wage and nonfarm data would come out.

"I believe that the headline job number at a disappointing 160,000 is very weak and will fail to convince voting members that it is still a wise idea to raise interest rates next month," Ahmad said.

The dollar immediately tanked after the disappointing figures, but recouped most of its lost territory shortly after. The ICE dollar index was down 0.2% to 93.605, largely unchanged from before the data.

The euro traded at $1.1421, up from $1.1417 before the labor data.

Oil rally: Late in Friday's trading session, European stocks started to pare losses as oil prices staged a rebound and logged solid gains. The advances came as a wildfire in oil-rich regions of Canada and an attack on an Chevron-operated offshore oil facility in southern Nigeria, fueled concerns about global crude-output disruptions.

Shares of Repsol SA (REPYY) gained 1%, Total SA (TOT) (TOT) added 0.9% and BP PLC (BP.LN)(BP.LN) climbed 0.7%.

Stocks to watch: ArcelorMittal SA (MT)(MT) shares fell 1.2% after the world's largest steelmaker by production said it's still concerned about excess steel capacity in China (http://www.marketwatch.com/story/arcelormittal-narrows-loss-cautions-on-china-2016-05-06). The company's first-quarter net loss narrowed to $416 million while revenue dropped 22% in part on lower prices for steel and iron ore.

Randgold Resources Ltd. (RRS.LN) (RRS.LN) surged 6.6% as gold prices rose 1.8%.

Indexes: Germany's DAX 30 rose 0.2% to 9,869.95 and France's CAC 40 gave up 0.4% to 4,301.24.

The U.K.'s FTSE 100 index added 0.1% to 6,125.70.

(END) Dow Jones Newswires

May 06, 2016 12:13 ET (16:13 GMT)

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