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European Markets Close Lower After Volatile Week; U.S. Jobs Report Falls Short; Tui Slides 15%

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  • Friday's U.S. nonfarm payrolls report, a key indicator for the Federal Reserve as it prepares to slow its $120 billion-per-month bond-buying program, badly missed expectations.
  • Ireland relinquished its opposition to new global corporate tax rules later on Thursday, agreeing to forego its 12.5% tax for large multinational corporations.

European markets closed lower on Friday afternoon following a roller-coaster week for global stocks, as investors digested a dire U.S. jobs report.

The pan-European Stoxx 600 ended down 0.2%, with autos gaining 1.2% while tech slid 1.3% to lead losses.

Markets have fluctuated hard over the past week as global investors assess the possibility of persistent high inflation, with U.S. bond yields driving jitters for growth-oriented tech stocks.

Friday's U.S. nonfarm payrolls report, a key indicator for the Federal Reserve as it prepares to slow its $120 billion-per-month bond-buying program, badly missed expectations. The U.S. economy created just 194,000 jobs in September against a Dow Jones estimate of 500,000, the Labor Department reported.

This followed a big miss in August, when just 235,000 jobs were added against a consensus forecast of 720,000. The unemployment rate fell to 4.8% versus expectations of 5.1%.

On Wall Street, stocks rose with the S&P 500 headed for a winning week as optimism about a short-term debt ceiling deal trumped the disappointing jobs report.

"After looking like almost a done deal, today's jobs number has thrown expectations for tapering into disarray," said Seema Shah, chief strategist at Principal Global Investors.

"The Fed doesn't seem to need much to convince it that tapering should begin imminently, but at just 194,000, jobs numbers are suggesting that the labour market is further from hitting the substantial progress goal than they expected."

Back in Europe, Ireland relinquished its opposition to new global corporate tax rules on Thursday, agreeing to forego its 12.5% tax for large multinational corporations in a key development for efforts to install a worldwide minimum rate of "at least" 15%.

In corporate news, Stellantis is reportedly mulling splitting off two of its Opel plants in Germany, one of which is temporarily closing next week due to the global semiconductor shortage.

On the data front, Germany's trade balance for August came in at positive 13 billion euros (positive $15 billion) on a seasonally adjusted basis, slightly below a forecast of 15.8 billion euros.

In terms of individual share price movement, French car parts manufacturer Faurecia gained 4.4% to lead the Stoxx 600 by mid-afternoon deals.

At the bottom of the index, Tui plunged more than 15% as further flight and holiday cancellations continued to bite. The Anglo-German travel operator is planning a 1.1 billion euro capital increase to service a spike in demand for holidays.

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