Global equities rebounded on Friday from an initial selloff to close the week with strong gains while US bond prices climbed after a weak employment report increased worry about slowing global growth.

The economy created 142,000 jobs in September, well short of the 203,000 forecast, and August numbers were revised sharply lower to show only 136,000 jobs, the US Labour Department said.

Bond prices jumped, with benchmark US Treasury yields falling to their lowest level in slightly over 5 months. The 10-year US Treasury note was last up 17/32 in price to yield 1.9824 per cent.

US stocks managed to rebound from sharp declines, buoyed by gains in the beaten down energy and materials sector.

"These numbers are weaker than expected, but not alarmingly weak," said Brad Lipsig, senior portfolio manager at UBS Wealth Management in New York.

"The risk is that they continue on a weakening trajectory. This could mean that weakness in overseas economies is now affecting the US economy."

Years of cheap central bank cash after the 2007-2008 financial crisis have supported asset prices, but recent signs of a slowdown in global economic growth, and the Fed's decision last month to postpone raising interest rates, have unnerved investors betting on a return to more normal policy.

The weak jobs report likely pushes out the timeline for the Fed to raise interest rates for the first time in nearly a decade. Fed funds futures implied traders see nearly no chance the US central bank would end its near-zero rate policy in October, according to CME Group's FedWatch program, with a hike likely to occur in March 2016.

The Dow Jones industrial average rose 200.36 points, or 1.23 per cent, to 16,472.37, the S&P 500 gained 27.54 points, or 1.43 per cent, to 1,951.36 and the Nasdaq Composite added 80.69 points, or 1.74 per cent, to 4,707.78.

The pan-European FTSEurofirst 300 also erased early gains, buoyed by utility stocks, and closed down 0.4 per cent. MSCI's all-country world stock index climbed 1.1 per cent and was up 0.8 per cent for the week.

The US dollar index of major currencies which had advanced before the employment report was down 0.3 per cent to 95.936 after hitting a two-week low of 95.218.

In contrast, gold prices reversed course and climbed more than 2.2 per cent to last trade at $1,282.80 an ounce, its biggest per centage jump since mid-January. They had fallen to a two-week low before the report. Silver advanced 5.1 per cent, its biggest per centage gain since December, to $15.17 an ounce.

Concerns about US monetary policy and a slowdown in emerging markets led by China have hit commodities markets and related stocks, like Glencore, this week and ramped up volatility.

After earlier declines, copper also moved higher and was up 0.1 per cent to $5,100.15 per tonne, as the increased possibility the Fed will hold off on a rate hike tempered growth worries.

US crude settled up 1.8 per cent to $45.54 per barrel. Brent settled up 0.9 per cent to $48.13 after a report showing the fifth weekly decline in the US oil rig count added to signs of falling production in the world's top oil consumer. – Reuters