(Corrects second paragraph to note highest S&P 500 close since
* US jobs growth brakes in Aug, seen forcing Fed's hand
* Unemployment rate falls to 8.1 pct in Aug from 8.3 pct
* Stocks: Dow flat, S&P 500 up 0.2 pct, Nasdaq off 0.1 pct
By Angela Moon
NEW YORK, Sept 7 (Reuters) - U.S. stocks were little changed
on Friday as investors weighed the chances that a
weaker-than-expected jobs report would spur the Federal Reserve
to launch another round of economic stimulus.
The report came a day after the S&P closed at its highest
level since January 2008 - months before the collapse of Lehman
Brothers - and the Nasdaq hit a 12-year high.
Nonfarm payrolls increased only 96,000 last month, the Labor
Department said on Friday. While the unemployment rate dropped
to 8.1 percent from 8.3 percent in July, it was largely due to
Americans giving up the search for work.
The weak figures potentially set the stage for the Fed,
which meets next week, to pump additional money into the
sluggish economy. The job numbers also dealt a blow to President
Barack Obama as he seeks re-election in November.
"The real question is what does the Fed do with this
report?" said Steve Blitz, chief economist at ITG Investment
Research, adding that the report may not be enough for the Fed
to introduce more stimulus.
"As for the drop in the labor force and labor participation
rate, it is troubling for the Fed, no question, but some part of
that number relates to the retirement of the baby boomers," he
The Dow Jones industrial average was up 3.95 points,
or 0.03 percent, to 13,295.95. The Standard & Poor's 500 Index
was up 2.84 points, or 0.20 percent, to 1,434.96. The
Nasdaq Composite Index dropped 3.07 points, or 0.10
percent, to 3,132.74.
Shares of Pandora Media Inc fell 18 percent to $10.34
following media reports that Apple Inc was in talks to
license music for a radio service like the one Pandora operates.
The Wall Street Journal, citing people familiar with the
matter, reported that Apple wants to license music for a
custom-radio service that would work on its hardware, such as
the iPhone, iPads and Mac computers, in a bid to expand its
dominance in online music. Apple's iTunes is the largest music
Intel Corp cut its third-quarter revenue estimate
and withdrew its full-year forecast, saying demand for its chips
declined as customers reduced inventory and businesses bought
fewer personal computers. The revenue warning sent shares of the
world's largest chipmaker down more than 3 percent to near $24.
(Editing by Dave Zimmerman)