Stocks nudge higher after U.S. employment growth slows sharply

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U.S. stock markets rose on Friday after data showed U.S. employment increasing far less than expected in September amid a decline in government payrolls.

Ten-year U.S. Treasury yields rose to as high as 1.6%, their highest since June when they touched the same level, ahead of the payrolls release. By 1250 GMT they were up 1 basis point at 1.58%.

Stocks looked set to hold most of the previous session's gains as investors welcomed the U.S. Senate's temporary lifting of the debt ceiling. The rally on Thursday had lifted global stock indexes into positive territory for the week, despite widespread selling initially as investors fretted about soaring energy prices and the prospects of faster than expected interest rate rises to combat inflation.

Still, the mood remains nervous -- oil prices rallied back towards multi-year highs and government bond yields climbed in early Friday trading., which tracks shares in 50 countries, was up 0.1% and is now up 0.9% for the week. But the index is more than 4% off its record high reached in early September."There is so much liquidity out there and there is no alternative to stocks - so each time there is a pullback, 'buy-the-dip' kicks in.

Supporting risk sentiment was the U.S. Senate's approval of legislation to raise the federal government's debt limit and avoid the risk of a historic default, though it only put off a decision on a longer-term remedy until early December.

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