* U.S. employers hire more in October than expected
* Materials, energy shares are biggest drags on day
* Starbucks raises outlook, U.S. sales beat expectation
* Indexes down: Dow 0.3 pct, S&P 0.2 pct, Nasdaq 0.2 pct
By Ryan Vlastelica
NEW YORK, Nov 2 (Reuters) - U.S. stocks edged lower on
Friday, erasing earlier gains spurred by a
stronger-than-expected payroll report, as they were pressured by
weakness in energy and materials shares.
Employers added 171,000 people to their payrolls last month,
the Labor Department said on Friday. The number outpaced
forecasts, and the government also said 84,000 more jobs were
created in August and September than initially estimated. Still,
sustained job gains of this magnitude would only bring the
unemployment rate down slowly.
"The report itself was good, but just not good enough,
especially after the pre-rally we had yesterday," said Todd
Schoenberger, managing principal at the BlackBay Group in New
York, referring to a 1.1-percent surge in the S&P on Thursday,
the index's best day since Sept. 13.
The latest jobs report, which is the last one before the
U.S. presidential election on Tuesday, could boost President
Obama's fortunes at the ballot box, though polls continue to
indicate a close race between Obama and Republican candidate,
"With the election next week, and the outcome of that still
so uncertain, some modest downward pressure is to be expected
for the rest of the day," Schoenberger said.
Materials shares were the day's weakest, falling 0.9
percent, pressured by Newmont Mining Corp, which dropped
5.6 percent to $50.24 after its profits missed expectations.
Chesapeake Energy weighed on energy stocks after its
shares fell 6.7 percent to $18.72, well outpacing a 1.8 percent
drop in the price of crude oil.
The Dow Jones industrial average was down 45.23
points, or 0.34 percent, at 13,187.39. The Standard & Poor's 500
Index was down 2.27 points, or 0.16 percent, at 1,425.32.
The Nasdaq Composite Index was down 7.24 points, or 0.24
percent, at 3,012.82.
The S&P 500 is still on track for its best weekly gain since
the week ended Sept. 16, lifted by a rally Thursday, when the
index enjoyed its best day in seven weeks thanks to bullish
consumer confidence and private-sector jobs data.
The current trading week has been shortened by a historic
two-day market closure Monday and Tuesday, spurred by the
superstorm Sandy's devastating sweep through the U.S. Northeast.
The S&P 500 index is down more 2 percent from a recent peak
in September, and is below its 50-day moving average, amid
investor caution ahead of the election and tough government
budget negotiations at the end of the year.
Starbucks Corp jumped 11.2 percent to $51.84 after
raising its profit forecast for the fiscal year as sales in the
U.S., its top market, beat expectations, providing the company
optimism that has eluded much of the U.S. restaurant industry in
Professional social network LinkedIn Corp beat Wall
Street's third-quarter profit and revenue targets, as
advertising rates increased and sales from its hiring services
nearly doubled. The shares rose nearly 3 percent to $109.95.
From New York City's Staten Island to the popular beach
towns of the Jersey Shore, rescuers and officials continued to
face widespread destruction Friday wrought by Sandy, as well as
a rising death toll and frustration over delayed relief and fuel
Verizon may take another two weeks to restore
telecommunication services for its customers after flooding and
power outages knocked out services during superstorm Sandy,
according to a top executive at the company. The stock was down
0.2 percent at $45.05.