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Wall Street Opens Mixed on Ambiguous Jobs Report; Dow up 40 Pts

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By Geoffrey Smith -- U.S. stock markets opened mixed on Friday, on course to end the week lower after a hard-to-read employment report that failed to dispel worries about labor shortages and inflationary pressures, despite a sharp slowdown in headline jobs growth.

By 9:45 AM ET (1445 GMT), the Dow Jones Industrial Average was up 41 points, or 0.1%, at 34,681 points. The S&P 500 was also up 0.1% but the Nasdaq Composite was down 0.4%, amid suspicions that the report will do little to convince the Federal Reserve to change its mind about hurrying up the end of its bond purchases. James Bullard, the hawkish head of the St. Louis Federal Reserve, said that the Fed needs to complete the phase out of its quantitative easing program no later than March next year.

The Labor Department had said earlier that nonfarm payrolls grew by only 210,000 in October, the smallest monthly gain all year and well below the 550,000 consensus forecast. However, other parts of the report painted a brighter picture, with the unemployment rate falling to 4.2% as labor force participation rose to its highest level since the start of the pandemic. Both permanent and temporary layoffs also fell to their lowest level in over a year.

Reinforcing the impression of an economy that is still running hot in many places, the Institute of Supply Management's non-manufacturing PMI surged to a new record high of 69.1 in November, well above expectations.

The market also remained under pressure from pandemic newsflow. The World Health Organization said it has now detected the Omicron variant of Covid-19 in 38 countries, up from 23 only two days ago. Preliminary findings presented by authorities in South Africa - where the variant was first detected - suggest that Omicron is not only more contagious than the Delta variant that has dominated this year's statistics, but is also more likely to affect younger age groups.

Among early movers DocuSign (NASDAQ:DOCU) stock stood out, losing nearly 40% after the company warned late on Thursday that its billings growth is slowing, another anecdotal sign that corporate behavioral shifts due to the pandemic are starting to reverse. The company had been one of the biggest beneficiaries of the move to the hybrid work model that needs software to support remote work in an ever broader range of applications. However, it also boasted one of the most stretched valuations of any established company, with its market value being some 20 times expected sales this year.

Smith&Wesson (NASDAQ:SWBI) stock was another big loser, the gunsmith falling 25% to a seven-month low after reporting a 7% quarterly drop in sales in the last quarter as the hoarding of guns and ammunition in the wake of the pandemic and the hotly-contested U.S. elections last year subsided. Tesla (NASDAQ:TSLA) stock fell another 4.1% amid continued selling by CEO Elon Musk.

Elsewhere, Chinese ADRs slumped after Didi Global's (NYSE:DIDI) confirmation of its plans to delist triggered fears of a disorderly exit from U.S. capital markets under regulatory pressure on both sides of the Pacific. Didi ADRs fell 15%, while Alibaba ADRs (NYSE:BABA) fell 10.2% and Pinduoduo (NASDAQ:PDD) ADRs fell 11.2%

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