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European Stocks Close Mostly Lower Following U.S. Jobs Report

European stocks closed mostly lower on Friday following the release of disappointing U.S. jobs data. Investors also fretted over political risks in Spain and the U.K.

The pan-European Stoxx Europe 600 Index fell by 0.4 percent on the day. The French CAC 40 Index also dropped by 0.4 percent and the German DAX Index edged down by 0.1 percent, although the U.K.'s FTSE 100 Index rose by 0.2 percent.

The lower close came following the release of a report from the Labor Department showing an unexpected drop in U.S. employment in the month of September.

The report said non-farm payroll employment fell by 33,000 jobs in September after climbing by an upwardly revised 169,000 jobs in August. Economists had expected employment to rise by 90,000 jobs.

The Labor Department said a sharp decline in employment in food services and drinking places and below-trend growth in some other industries likely reflected the impact of Hurricanes Harvey and Irma.

Despite the unexpected drop in employment, the unemployment rate dipped to 4.2 percent in September from 4.4 percent in August. Economists had expected the unemployment rate to hold at 4.4 percent.

Spanish banks came under selling pressure again after the Catalan government said it would press ahead with its planned parliament meeting on Monday to discuss Sunday's referendum result and announce a unilateral declaration of independence in defiance of a court ban.

In the U.K., pressure is mounting on Prime Minister Theresa May after former Tory party chairman Grant Shapps admitted he is running a campaign to oust her.

Also, with all eyes set on the U.S. jobs report due later in the day, a weaker euro and encouraging factory orders data from Germany failed to enthuse investors.

Danish biotech company Genmab slumped by 2.9 percent after JP Morgan downgraded its rating on the company's stock to Neutral.

Building materials group CRH dropped 1.3 percent after acknowledging a rival third party bid for the takeover of Ash Grove Cement Co.

Meanwhile, British postal service and courier company Royal Mail advanced by 1.5 percent despite workers voting for an industrial action.

Novartis also rose modestly after its eye care unit Alcon achieved European CE Mark for the Clareon IOL with the AutonoMe delivery system.

French automaker Renault also moved to the upside after announcing a six-year plan to deliver annual revenues of over 70 billion euros.

In economic news, German factory orders rebounded at a faster than expected pace in August, data from Destatis showed. Factory orders grew 3.6 percent in August, reversing a revised 0.4 percent drop in July.

The French trade deficit narrowed to an eight-month low in August due to an acceleration in exports and a decline in imports, the customs office said. The current account deficit, meanwhile, narrowed to 1.5 billion euros in August from 4.3 billion euros in July.

Permanent job placements in the U.K grew at the weakest pace in five months in September, the Report on Jobs compiled by the Recruitment and Employment Confederation and IHS Markit showed.

U.K. house prices increased 4 percent year-on-year in the three months to September, faster than the 2.6 percent rise seen in three months to August, data from mortgage lender Halifax and HIS Markit showed.

by RTTNews Staff Writer

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