U.S. STOCKS, BONDS

U.S. stocks fell sharply Friday to cap a holiday-shortened week marred by weak readings on the U.S. economy. The Dow Jones Industrial Average finished Friday off 124.20 points, or 0.96%, at 12772.47, as investors responded to a third consecutive month of employment data that were worse than expectations.

Commodities markets suffered another day of big declines amid signs that one of the world's most reliable growth engines, the U.S., may be succumbing to a bout of slowness.

The Labor Department reported that the U.S. saw just 80,000 new jobs created in June, below expectations for 100,000. The Standard & Poor's 500-stock index gave up 12.90 points, or 0.94%, to 1354.68.

The Nasdaq Composite eased 38.79 points, or 1.3%, to 2937.33, but booked its fifth straight week of gains. Leading the fall Friday were stocks from the material and industrial sectors sensitive to global growth, with Caterpillar and Alcoa two of the worst performers among Dow components.

The technology sector slipped the most of the S&P 500's 10 sectors. Eight of the index's top decliners were software companies and those tied to cloud-computing technology. Teradata, Citrix Systems, F5 Networks, Red Hat, Autodesk, EMC, JDS Uniphase and Salesforce.com each fell 4.5% or more.

The fall came as one data-integration software company, Informatica, offered a soft revenue outlook. News reports about a piece of "malware," or malicious software, that some feared could affect computer networks Monday also may have contributed to declines by tech shares.

The Labor Department's monthly employment report spurred the bulk of declines, though. The soft reading comes on the heels of similarly disappointing reports on the U.S. manufacturing and services sectors, and caught some economists off guard.

On Thursday, many of them had nudged their predictions for Friday's report modestly higher, following a surprisingly strong report on private-sector payrolls. In corporate news, Informatica tumbled nearly 28% after providing a second-quarter earnings and revenue outlook that was below analyst forecasts.

The company also said it was adding $100 million to its stock-buyback program. Deutsche Bank shares trading on American exchanges lost 5.1% on news German financial regulators were investigating the bank in relation to a probe of benchmark borrowing rates that has already ensnared Barclays PLC.

EUROPEANS STOCKS, BONDS

European stock markets ended lower Friday as disappointing U.S. jobs data added to worries about global growth and Spanish stocks groaned under the strain of bond yields that almost hit 7%.

The Stoxx Europe 600 index fell 1% to 254.41, its third straight loss, although it notched a gain of 1.3% for the week. Banks and car stocks fell as those sectors took another ding after a disappointing U.S. jobs report confirmed market worries about the global growth picture.

Spanish lender BBVA slid 5.1%, making it one of worst-performing financial stocks. Hardest hit among Europe's bourses was Spain's IBEX 35 index, which tumbled 3.1% to 6738.90.

The battered market has plunged 21% so far this year. Along with sharp losses for BBVA, Banco Santander fell 3.9% as investors remain worried about the health of the country's banking sector.

As stock prices fell, so did those for bonds, pushing the yield on the country's 10-year government bond to nearly 7%, a level that analysts consider unsustainable over the longer term. The 10-year yield rose 0.18 percentage point to 6.98%, leaving it around levels not seen since before the European Union summit a week ago.

Spain reported industrial production sank 6.1% in May from a year earlier. While the decline wasn't as steep as feared, production has now shrunk for nine consecutive months. Ioan Smith, director at Knight Capital Europe, said with yields on Spain's bonds soaring, it is clear the "half-life" of decisions reached during the June 28-29 European Union summit had been less than a week.

Underscoring the dismal growth picture, Peugeot dived 7.7%. France's biggest car maker said global sales plunged in the first half of the year because of recessions in key European markets. The CAC 40 index dropped 1.9% to 3168.79. Tire maker Michelin dropped 2.5%.

German car makers Daimler and BMW slid 3.3% and 4.6%, respectively. But banks were also falling fast, with Societe Generale sliding 5.7% and Credit Agricole declining 4.6%, both in Paris. In Frankfurt, Commerzbank dropped 3.5% and Deutsche Bank fell 4.7%. Barclays lost 2.1% in London. Among other national benchmarks, the DAX 30 index fell 1.9% to 6410.11 and the FTSE 100 index fell 0.5% to 5662.63.

ASIA-PACIFIC STOCK MARKETS

Most Asian markets fell Friday as worries resurfaced over the global economy, but mainland Chinese stocks climbed following a surprise interest-rate cut.

The People's Bank of China cut borrowing costs for the second time in less than a month to help offset the country's worst slowdown since the global financial crisis.

The rate cut was another blow for Chinese banks--which have performed poorly since the last rate cut--as the lending rate was cut by more than the deposit rate, squeezing their profitability.

As a result, all nine of the Hong Kong listed Chinese banks fell on the news. Industrial and Commercial Bank of China fell 0.7%, exacerbating its 5.4% fall since the June 7 rate cut, while China Construction Bank fell 2.7%.

Property developers benefited though because of cheaper funding, with China Overseas Land and Investment and China Resources Land climbing 4.8% and 1%, respectively, while Evergrande Real Estate jumped 6.6%.

Strong performance in consumption and transportation stocks helped the Hang Seng Index overcome the weakness in financials to finish flat at 19,800.64.

In mainland China, the Shanghai Composite hit a six-month low at one point before finishing the day 1% up at 2223.58 as investors warmed to the government's pro-growth measures.

Elsewhere, Japan's Nikkei was down 0.7% at 9020.75. Although most markets closed lower Friday some major ones were able to notch up respectable gains for the week, with Hong Kong's Hang Seng Index up 1.9% over the past five sessions.

South Korea's Kospi edged 0.9% lower to 1858.20 as the index was weighed down by its largest constituent, Samsung Electronics. The index heavyweight dropped 2% after its earnings guidance for the second quarter disappointed investors.

COMMODITIES
Copper closed at its lowest price in over a week on the London Metal Exchange Friday after a much-anticipated payroll reading from the U.S. failed to lift hopes for a third round of quantitative easing from the Federal Reserve.

At the close, LME three-month copper was down 2.1% on the day at $7,530 a metric ton, its lowest close since June 28. Nickel lost the most ground, ending the session at $16,150/ton, down 3.3%.

Crude oil futures fell 3.3% Friday after a surprisingly weak U.S. jobs report and amid expectations a Norwegian oil strike would end soon.

Light, sweet crude for August delivery settled at $84.45 a barrel on the New York Mercantile Exchange, down $2.77. Brent crude on the ICE futures exchange settled at $98.19 a barrel, down $2.51 or 2.5%.

Gold futures fell, tracking declines in the euro after a reading on the U.S. labor market missed forecasts but didn't show enough weakness to lift expectations the Federal Reserve will have to act to prop up the economy.

The most actively traded gold contract, for August delivery, fell $30.50, or 1.9%, to settle at $1,578.90 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest ending price since June 28. FROM MORRISON SECURITIES PTY. LTD.