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* U.S. economy adds 130,000 jobs in August
* Average hourly earnings gained 0.4%
* Stocks set for second straight week of gains
* Indexes up: Dow 0.35%, S&P 0.17%, Nasdaq 0.02%
By Uday Sampath Kumar
Sept 6 (Reuters) - U.S. stocks edged higher on Friday as
China's stimulus plan helped ease some concerns around global
growth, while investors digested underwhelming jobs data that
capped a week of mixed economic signals.
China's central bank said it would slash the amount of cash
that banks must hold as reserves, releasing a total of 900
billion yuan ($126.35 billion) in liquidity to shore up the
flagging economy.
Weaker-than-expected payroll growth in August hinted at a
slowing U.S. economy, helping cement expectations of an interest
rate cut by the Federal Reserve later this month.
Speaking at the University of Zurich, Fed Chairman Jerome
Powell said the labor market was strong and the central bank
will continue to "act as appropriate" to sustain economic
expansion. He also said the United States and the world economy
are not likely to fall into recession. The Labor Department's nonfarm payroll data showed the
economy added 130,000 jobs in August, below expectations of a
gain of 158,000, according to a Reuters survey of economists. average hourly earnings gained 0.4% last month, the
largest increase since February, raising hopes that healthy
consumer spending could put inflation on track to meet the Fed's
target.
"If the Fed is bent on becoming more dovish, the jobs data
coming in shy of expectations feeds into that narrative and if
they want to become more neutral, the wage inflation increasing
above expectations strengthens that narrative," said Keith
Buchanan, portfolio manager at Globalt in Atlanta.
"There's something to take for everyone from this report,
not only among market participants, but for those from within
the Fed as well."
Even though poor August factory data and tit-for-tat tariffs
caused a turbulent start, Wall Street's major indexes were on
track for their second straight week of gains.
Easing political tensions in Hong Kong, hopes of a
de-escalation in the U.S.-China trade dispute, strong growth in
August private payrolls and an accelerating services sector
boosted stocks to one-month highs this week.
The benchmark S&P 500 .SPX is now just 1.66% away from its
record high hit in July and is on track to recover its losses
from August.
The communication services sector .SPLRCL was the biggest
drag among the 11 major S&P sectors, as Facebook Inc FB.O
slipped 2.05% after U.S. state attorneys general said they would
investigate if the social media giant stifled competition and
put users at risk. At 13:12 ET, the Dow Jones Industrial Average .DJI was up
94.30 points, or 0.35%, at 26,822.45, the S&P 500 .SPX was up
5.11 points, or 0.17%, at 2,981.11 and the Nasdaq Composite
.IXIC was up 1.36 points, or 0.02%, at 8,118.18.
Among other stocks, Boeing (NYSE:BA) Co BA.N rose about 1.1% and was
the biggest boost to the Dow Industrial.
Advancing issues outnumbered decliners by a 1.78-to-1 ratio
on the NYSE and a 1.32-to-1 ratio on the Nasdaq.
The S&P index recorded 49 new 52-week highs and no new lows,
while the Nasdaq recorded 52 new highs and 35 new lows.