US stocks open sharply lower on jobs report

US stocks opened sharply lower on Friday as investors were digesting the highly-watched jobs data.

US non-farm payrolls data came out mixed, which missed on the headline number but beat estimates on the unemployment rate and wage indicators.

The Labor Department reported Friday that total non-farm payroll employment increased by 173,000 in August, well below market consensus of 223,000. Over the prior 12 months, employment growth had averaged 247,000 per month.

The unemployment rate, however, edged down to 5.1 percent, beating market estimates of 5.2 percent. The number of unemployed persons edged down to 8 million.

Over the year, the unemployment rate and the number of unemployed persons were down by 1.0 percentage point and 1.5 million, respectively.

In August, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $25.09, also higher than market expectations.

The jobs report is the final read on monthly labor conditions before the Federal Reserve makes a decision on interest rates at its next policy meeting in about two weeks.

"A below-consensus headline with a big upward revision adds up to economic data good enough to justify a rate hike in two weeks if economic data were all that mattered," chief economist at FTN Financial Chris Low said in a note.

Shortly after the opening bell, the Dow Jones Industrial Average dipped 162.61 points (0.99 percent), to 16,212.15. The S&P 500 lost 19.67 points (1.01 percent), to 1,931.46. The Nasdaq Composite Index tumbled 62.66 points (1.32 percent), to 4,670.84.

On Thursday, US stocks pared early gains to end mixed as investors tried to digest a batch of mixed economic reports.