U.S. MARKET AVERAGES

While broader market averages traded mostly higher during the session, traders remain less than convinced that latest employment situation report reflect the reality of the job market. Market is still on hold and is looking for more evidence on loss of employment related to two hurricanes. The current September employment data suggests much smaller job loss of 35,000 when most economists were expecting loss of 150,000 for the month.

Broader averages Dow, S&P and Nasdaq closed up with mild gains for the day but for the week averages suffered loss of 3%. For the record during the week, the Nasdaq closed down 2.9%, the Dow fell 2.6% and the S&P dropped 2.7%. Markets in Brazil and Mexico advanced 2.55% and 1.31%. Brazil index crossed psychologically important barrier of 30,000 before settling tad below the level. Banks and mining stocks led the rally.

Energy sector after losing more than 11% for the first four days of the week recovered 1.9% on Friday as crude oil climbed 48 cents to $61.84 per barrel. Mining and mineral stocks recovered on Friday in sympathy with rising prices of copper, silver and gold. Copper closed at record high of $1.8085 per ounce. Gold jumped $2.70 to $477.70 and silver closed up 17.5 cents to $7.77 per ounce. Phelps Dodge (PD: chart) closed up $4.07to $129 and Newmont Mining (NEM: chart) up 61 cents to $47.52.

Research in Motion (RIMM: chart) was dealt a set-back as U.S. Court of Appeals rejected its motion to hear arguments to reconsider prior decision that the company had violated several patent claims held by NTP Inc. In 2003 the court had ordered the company to pay 8.55% royalty to NTP for all U.S. sales of mobile devices BlackBerry. The company has been fighting the case for more than four years and has set asides $450 million in reserves to settle all claims. The company stock fell 3.6% to $64.55.

MOVERS AND SHAKERS

Auto-parts producer Delphi Corp. (DPH: chart) could seek protection from creditors under Chapter 11 of federal bankruptcy law today, according to the Detroit News, pointing a confidential update to United Auto Workers members from the union's International Bargaining Team. The report comes as Delphi is pressing the UAW for a package of concessions including a two-thirds cut in wages and benefits, according to the Wall Street Journal. Delphi fell 25%.

Time Warner Inc. (TWX: chart) and Microsoft Corp. (MSFT: chart) are in discussion about forming a combination of their Internet divisions, according to the Wall Street Journal. The companies are looking for ways to combine MSN's search engine technology with AOL's Web content. The two companies originally began talks about a sort of Internet deal earlier this year. Time Warner shares dropped 0.4% while Microsoft added 0.2% yesterday.

Office supply retailer Staples (SPLS: chart) could be active after the company announced a stock repurchase program for $1.5 billion. Staples also reapeated its fiscal third-quarter earnings expectations. The company said it expects third-quarter earnings of 32 cents a share and full-year profits of $1.11 a share. Staples gained 4%.

Telecom equpment producer UTStarcom (UTSI: chart) lost almost a quarter after the company said it has been alerted of a formal inquiry by the Securities & Exchange Commission into its financial statements during previous reporting periods. The company said it is cooperating with the inquiry. UTStarcom also narrowed its third-quarter revenue outlook. The company fell 31%.

Apple Computer Inc. (AAPL: chart) was down 2.4% due to a report of a critical note from SG Cowen. The company is going through a more fruitful period, but it's not immune from macroeconomic storms, according to the broker. SG Cowen downgraded Apple to neutral.

ECONOMIC NEWS

The U.S. economy lost jobs for the first time in more than two years in the month of September, according to a report from the Labor Dept., with the decrease largely due to the impact of Hurricane Katrina.

The report showed that non-farm payroll employment fell by 35,000 jobs in September following an upwardly revised increase of 211,000 in August. Economists had been expecting a more significant decline of about 150,000.

The Labor Dept. noted that the job losses caused by Hurricane Katrina may have been offset in some industries by developments in the rest of the country.

However, the report also showed that the unemployment rate rose to 5.1 percent in September from 4.9 percent in August. Economists had expected the unemployment rate to edge up to 5.0 percent.

While the smaller than expected drop in jobs may offset some of the fears about the impact of Hurricane Katrina, it may add to concerns about higher interest rates. If the economy is able to digest the storms with relative ease, the Fed will likely not hesitate to continue raising rates to battle inflation.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed broadly lower on weak U.S. equity markets, speculations of interest-rate hikes and expectations of U.S. September nonfarm payroll data. The Nikkei was the leading decliner, falling down by 1% on high tech issues sell-off, followed by South Korea’s Kospi, down 0.1% on exporter-related stocks. Hong Kong’s Hang Seng ended up 0.1%. The dollar bought 113.34 yen.

European markets finished in the negative territory after a day of volatile trading. The U.S. nonfarm payroll data release weighed on the market sentiment, as well as some corporate news, saying that BP is selling one of its units for $9 million and Reckitt Benkister is buying beauty retailer Boots. The German DAX 30 shed 0.2%, the French CAC 40 lost 0.2%, and London’s FTSE 100 fell 0.2%.