European stocks had their best week in two months

On Friday European stocks closed a choppy session lower as investors evaluated data showing a slowdown in jobs growth in the United States, but they still had their best week in two months as fears of rising inflation were lessened.

A U.S. Labor Department report showed nonfarm payrolls increased by 194,000 jobs last month, compared with an expectation of 500,000. Although this was not what was expected, analysts said excluding the seasonally tweaked factors, the number was not too disheartening.

The pan-European STOXX 600 index, which had lost as much as 0.5%, only briefly overturned the earlier losses after the data.

While strong numbers could strengthen the case for the U.S. Federal Reserve's removal of its backing for the economy, many analysts expect that even a second straight weak employment report may not be enough to keep back the central bank from announcing a slowdown of its bond purchases later this year.

Oil and auto stocks led the gains in Europe, but this was overshadowed by tech stocks shedding 1.4% as increasing bond yields reduced the high-growth sector's appeal.

The STOXX 600 gained 1% on the week as respite over a temporary lifting of the U.S. debt ceiling and as easing fears of an energy crisis calmed rallying oil and gas prices which had sparked inflation concerns.

MSCI's all-country world index shed 0.05% but gained 0.7% for the week. The Dow Jones Industrial Average shed 0.03%, the S&P 500 dropped 0.19% and the Nasdaq Composite fell 0.51%, dragged lower after Wells Fargo reduced its price target on Comcast Corp, which fell 4.7%. All three indexes gained for the week.

In Asia, the main share benchmark was supported by increases in Chinese blue chips, which gained 1.31% as trading restarted after the week-long National Day holiday. Sentiment improved from a private-sector survey that showed China's services sector returned to growth in September.