By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets erased gains in afternoon action on Friday, after Russian President Vladimir Putin reportedly said he would assist Syria if it suffers an external attack.
The Stoxx Europe 600 index fell 0.2% to 304.06, trimming its weekly gain to 2.3%. Earlier in the day the benchmark traded as high as 306.68 after weaker-than-expected jobs data from the U.S. increased speculation the Federal Reserve may delay its anticipated tapering of asset purchases.
Shares of Tullow Oil PLC gained 2.3% after the oil-exploration firm said the Wisting Central well has made the first ever oil discovery in the Hoop-Maud Basin in the Barents Sea.
Shares of Sage Group PLC dropped 1.5% after Morgan Stanley cut the software firm to underweight from equal weight. The analysts said they prefer rival firm SAP AG , given its strong position as market leader. SAP shares slipped 0.3%.
The broader European stock markets were sent on a roller-coaster ride in the afternoon, where they first moved higher after U.S. data, but then were sent sharply lower after Russian President Vladimir Putin added to international tensions about Syria. In St. Petersburg, where the G-20 meeting is taking place, Putin said Russia will continue its arms sales and aid to Syria even if other countries launch a military strike against the Middle Eastern nation, according to Dow Jones Newswires.
The comments came as U.S. President Barack Obama was trying to secure international and congressional support to launch an intervention in Syria for the country's alleged use of chemical weapons
Nonfarm payrolls disappoint
On the data front, the main event of the day was the U.S. nonfarm-payrolls report. The Labor Department said 169,000 new jobs were added to the economy in August, below the 173,000 expected by economists surveyed by MarketWatch. The unemployment rate, meanwhile, ticked down to 7.3% from 7.4%, but that was because fewer people were looking for work.
The jobs report is considered one of the most important data from the U.S. and a weak number could increase speculation the Federal Reserve will delay the anticipated tapering of its $85-billion-a-month asset purchases.
Read economists' and lawmakers' reactions to August payrolls.
"The bottom line is that today's report paints a picture for the labor market that is not as rosy as most had expected. Jobs are not being cut perhaps, but they are also not being created at a pace that signals a healthy, robust economy," said Jim Baird, chief investment officer for Plante Moran Financial Advisors, in a note.
"The Fed may still choose to move forward, but [the] recent jobs data certainly doesn't point to an economy that is firing on all cylinders. With the markets very focused on the Fed's next move, any sign that tapering could be delayed could be a positive catalyst, at least in the near term," he added.
U.S. stocks traded lower on Wall Street.
Germany's DAX 30 index dropped 0.3% to 8,212.22.
France's CAC 40 index lost 0.1% to 4,004.24, while the U.K.'s FTSE 100 index gave up 0.3% to 6,512.23.
In Germany, the financial sector was in the spotlight after Moody's Investors Service changed the outlook for the country's banking system to stable from negative, which it had been since April 2008.
Shares of Commerzbank AG rose 1.4% while Deutsche Bank AG (DB) slipped 0.2%.
-Sara Sjolin; 415-439-6400; AskNewswires@dowjones.com
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(END) Dow Jones Newswires
09-06-13 1039ETCopyright (c) 2013 Dow Jones & Company, Inc.
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