Dow on track for worst week in 2 months

(CNN) – The Dow climbed higher on Friday. Investors are betting that signs of an economic slowdown were strong enough to keep the Federal Reserve on track to keep cutting interest rates, a move that would boost stock prices.

Stocks were up following the September jobs report, which showed that 136,000 jobs were added to the economy. The unemployment rate dropped to 3.5%, its lowest level since December 1969.

Paul Ashworth, chief US economist at Capital Economics, called the report a “mixed bag” because of stagnant paycheck growth. Wages grew at their slowest pace since July 2018, which could slow consumer spending.

In addition, the pace of hiring continues to slow, partly because the United States is very close to full employment.

“In a sane world, the Fed would be raising rates on this data, but alas, they are still likely to cut in October,” said Bryce Doty, senior portfolio manager at Sit Fixed Income Advisors.

“Not because of the state of the domestic economy,” Doty added, as weakness in manufacturing caused by trade worries can’t be fixed with monetary policy. But much rather because the rest of he world has been shaken by the trade war and is slowing down.

The Dow, S&P 500 and Nasdaq Composite were all trading higher. The Dow was up more than 200 points, or 0.9%, and the S&P 500 also climbed 0.9%, and the Nasdaq Composite also gained nearly 1%.

Still, stocks were on track to finish the week in the red, with the Dow on pace to record their worst week since the mid-August. For the S&P, it will be the worst performance in five weeks.

To be sure, America’s economy remains strong: A tight labor market has kept consumer spending robust. Consumers account for two-thirds of gross domestic product. But the

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