GLOBAL MARKETS-The S&P 500 inches higher; Treasury yields dip after Powell remarks, jobs report

* Fed chair Powell speaks in Zurich
* U.S. jobs data disappoints
* China's central bank announces stimulus policy
* Treasury yields inch lower as likelihood of Fed rate cut
grows
* Crude prices post weekly gains

(Updates to market close)
By Stephen Culp
NEW YORK, Sept 6 (Reuters) - The S&P 500 posted a nominal
gain and Treasury yields edged lower on Friday, as remarks from
Federal Reserve chief Jerome Powell firmed interest rate cut
expectations and China announced an economic stimulus package,
both of which helped offset weaker-than-expected U.S. jobs data.
The roller-coaster week began with a flight to safety driven
by trade jitters and weak U.S. manufacturing data, but positive
geopolitical developments in Britain, Hong Kong and Italy, along
with news that U.S.-China trade talks would continue, revived
market risk appetite.
That appetite was further stoked after China's central bank
said it would lower the amount of cash that banks must hold as
reserves, in order to bolster the nation's weakening economy.
"Over the week we've seen risk assets rebound as favorable
economic data and positive geopolitical developments provided
comfort to investors that a broad slowdown isn't about to take
shape," said Charlie Ripley, senior market strategist for
Allianz Investment Management in Minneapolis.
But optimism was dampened by the U.S. nonfarm payrolls
report, which showed an increase of 130,000 jobs in August,
fewer than analysts expected. The underwhelming data provided another possible sign that
the longest-ever period of U.S. economic expansion is losing
steam and increased the likelihood that the Fed will cut rates
when it meets later this month.
But Ripley believes the jobs report was not as downbeat as
the headline number suggested.
"We still have an unemployment rate at 3.7% and wages are
increasing at a decent clip," Ripley said.
"Beyond that we had favorable comments from Powell, which
helped alleviate investor concern."
Indeed, in remarks made at a panel discussion in Zurich,
Powell called the jobs report consistent with a strong labor
market, adding that despite trade uncertainties he does not
foresee or expect a U.S. recession. The Dow Jones Industrial Average .DJI rose 69.31 points,
or 0.26%, to 26,797.46, the S&P 500 .SPX gained 2.71 points,
or 0.09%, to 2,978.71 and the Nasdaq Composite .IXIC dropped
13.75 points, or 0.17%, to 8,103.07.
European and emerging markets extended their gains as
China's stimulus announcement outweighed the disappointing
economic data from the United States and also from Germany.
The pan-European STOXX 600 index .STOXX rose 0.32% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.20%.
Emerging market stocks rose 0.51%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.65%
higher, while Japan's Nikkei .N225 rose 0.54%.
U.S. Treasury yields edged lower following Powell's
even-keel message, which cemented expectations that the Fed
would cut interest rates later this month.
Benchmark 10-year notes US10YT=RR last rose 4/32 in price
to yield 1.5517%, from 1.565% late on Thursday.
The 30-year bond US30YT=RR last rose 28/32 in price to
yield 2.0169%, from 2.054% late on Thursday.
The dollar was essentially flat against a basket of major
world currencies after the jobs report reinforced the likelihood
of further rate cuts from the Fed. The dollar index .DXY rose 0.01%, with the euro EUR=
down 0.05% to $1.1027.
The Japanese yen strengthened 0.02% versus the greenback at
106.94 per dollar, while sterling GBP= was last trading at
$1.2294, down 0.28% on the day.
Oil prices rose after Powell said the Fed would "act as
appropriate" to sustain an economic expansion that has been
hindered by global trade uncertainties. U.S. crude oil futures settled at $56.52 per barrel, up
0.39%, while Brent crude oil futures settled up 0.97% at $61.54
per barrel.
Gold dipped nearly 1% after Powell's remarks helped
jump-start risk appetite after the underwhelming jobs data.

Spot gold XAU= dropped 0.9% to $1,505.51 an ounce.
Copper CMCU3 lost 0.29% to $5,828.00 a tonne.
Three-month aluminum on the London Metal Exchange CMAL3
lost 0.06% to $1,783.00 a tonne.