US STOCKS-Wall Street ekes out gains after mixed U.S. jobs data

(Update to late afternoon trading, adds commentary, changes
byline, adds New York dateline)
* U.S. adds 130,000 jobs in August, earnings gained 0.4%
* Stocks set for second straight week of gains
* Indexes up: Dow 0.31%, S&P 0.17%, Nasdaq 0.04%

By Sinéad Carew
New York Sept 6 (Reuters) - Wall Street's major indexes
edged higher on Friday as investors digested mixed signals from
the U.S. jobs report and bet on a Federal Reserve interest rate
cut this month while China's stimulus plan helped ease some
concerns around global growth.
U.S. job growth slowed more than expected in August, with
retail hiring declining for a seventh straight month, but this
was countered by strong wage gains which are expected to support
consumer spending and keep the economy expanding moderately amid
rising threats from trade tensions. Also on Friday, speaking at the University of Zurich, Fed
Chair Jerome Powell said the labor market was strong and the
central bank will continue to "act as appropriate" to sustain
economic expansion. He also said the United States and the world
economy are not likely to fall into recession. "There's no question momentum in the labor market is waning
a little,” said Moira McLachlan, senior investment strategist at
AB Bernstein in Miami. "I don't think there's anything in there
to undermine the case for a rate cut in September."
Others said the mixed data gave the Fed options.
"If the Fed is bent on becoming more dovish, the jobs data
coming in shy of expectations feeds into that narrative and if
they want to become more neutral, the wage inflation increasing
above expectations strengthens that narrative," said Keith
Buchanan, portfolio manager at Globalt in Atlanta.
Also on Friday, China's central bank said it would slash the
amount of cash that banks must hold as reserves, releasing a
total of 900 billion yuan ($126.35 billion) in liquidity to
shore up the flagging economy.
At 3:04PM ET, the Dow Jones Industrial Average .DJI was up
81.52 points, or 0.31%, at 26,809.67, the S&P 500 .SPX had
gained 5.14 points, or 0.17%, to 2,981.14 and the Nasdaq
Composite .IXIC was up 3.17 points, or 0.04%, at 8,120.00.
Of the S&P 500's 11 major sectors healthcare .SPXHC was
the biggest boost with a 0.5% gain. The communication services
sector .SPLRCL was under pressure as Facebook Inc FB.O
slipped 1.6% after U.S. state attorneys general said they would
investigate if the social media giant stifled competition and
put users at risk. The Labor Department's nonfarm payroll data showed the
economy added 130,000 jobs in August, below expectations for a
gain of 158,000, according to a Reuters survey of economists.
While average hourly earnings gained 0.4% last month in the
largest increase since February, the annual increase dipped to
3.2% from 3.3% in July.
Advancing issues outnumbered declining ones on the NYSE by a
1.50-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.
The S&P 500 posted 52 new 52-week highs and no new lows; the
Nasdaq Composite recorded 57 new highs and 41 new lows.