(Updates with U.S. markets. previous dateline LONDON, changes
byline)
By Herbert Lash
NEW YORK, Feb 1 (Reuters) - U.S. stocks see-sawed on Friday
as worries about a jobs report that suggested the U.S. economy
was on the cusp of recession overshadowed Microsoft Corp's
<MSFT.O> bid for Yahoo Inc <YHOO.O> , while European shares
gained as miners rose on the purchase of a stake in Rio Tinto.
Oil fell to around $90 a barrel on concerns about the
economic slowdown in the United States, the world's top oil
consumer, overshadowing an OPEC decision not to raise output.
Investors bet a worsening U.S. employment outlook would
force the Federal Reserve to cut interest rates further,
pushing U.S. government bond prices higher.
U.S. employers cut payrolls for the first time in 4-1/2
years in January, the government said on Friday.
"There's a tug of war in the market. We have payrolls
shrinking but then we have had more M&A news in the last 24
hours than we had in the last 24 days," an equities trader
said. "M&A is helping support the market. Payrolls have been a
shocker though."
Microsoft's $44.6 billion cash-and-stock offer for Internet
company Yahoo suggested stocks were undervalued, and investors
snapped up bellwethers like General Electric Co <GE.N>, banks
and energy service companies.
The Yahoo deal would be the biggest Internet deal since the
Time Warner-AOL merger and seeks to bolster Microsoft against
an ever-more powerful Google Inc <GOOG.O>.
Chinese aluminum company Chinalco earlier announced it had
bought a 12 percent stake in miner Rio Tinto <RIO.L> jointly
with U.S. producer Alcoa <AA.N>. The news lifted mining stocks
in Europe, helping mask the impact of more bad news in the U.S.
economy.
The Dow Jones industrial average <> was down 0.24
points, or 0.00 percent, at 12,650.12. The Standard & Poor's
500 Index <.SPX> was up 3.98 points, or 0.29 percent, at
1,382.53. The Nasdaq Composite Index <> was down 3.16
points, or 0.13 percent, at 2,386.70.
In Europe the FTSEurofirst 300 <> index ended 1.83
percent higher at 1,353.91 points. Shares of French bank
Societe Generale <SOGN.PA> rose 5.5 percent on a newspaper
report that rival Credit Agricole <CAGR.PA> had hired Lazard
and its own investment bank, Calyon, to study a bid. Credit
Agricole denied comment.
Earlier, Japanese shares fell on Friday, hurt by worries
about the U.S. economy ahead of the the jobs data and as Sony
Corp <6758.T> shares slid after the maker of Playstation game
gear cut its profit forecast. The Nikkei 225 closed down 0.7
percent at 13,497.16 points.
Oil prices fell. OPEC ministers meeting in Vienna once
again rejected calls from consumer countries to pump more oil
amid worries that high fuel prices are adding to recessionary
pressures in the West.
U.S. light sweet crude oil <CLc1> fell $2.59, or 2.82
percent, to $89.16 per barrel. London Brent crude <LCOc1> also
was lower, down $1.67 at $90.54.
The dollar was up against a basket of major trading-partner
currencies, with the U.S. Dollar Index <.DXY> up 0.23 percent
at 75.352.
The euro <EUR=> was down 0.24 percent at $1.4829, and
against the Japanese yen, the dollar <JPY=> was down 0.02
percent at 106.33.
(Additional reporting by Caroline Valetkevitch, Pedro Nicolaci
da Costa, Kevin Plumberg in New York and Jeremy Gaunt and
Santosh Menon in London; Editing by Leslie Adler)
