The price of German Bund futures fell while European shares pared early strong gains but still ended higher as a US employment report failed to live up to grim expectations, relieving some fears of a US double-dip recession.

A string of disappointing reports on consumer spending, the housing market and factory activity has fueled forecasts that the US economy is slipping back into a recession.

MSCI's all-country world equity index dipped 0.1 percent, while its emerging markets index gained 0.3 percent.

The pan-European FTSEurofirst 300 index of top shares rose 0.1 percent to close at 969.66 points. For the week, the index lost 4.3 percent.

At midday, the Dow Jones Industrial Average was down 108.86 points, or 1.12 percent, at 9,623.67. The Standard & Poor's 500 Index was down 10.76 points, or 1.05 percent, at 1,016.61. The Nasdaq Composite Index was down 21.95 points, or 1.04 percent, at 2,079.41.

Technical measures on the S&P 500 weakened further after the benchmark index's 50-day moving average broke below its 200-day moving average, suggesting more downside pressure.

This "death cross" - a shorter-term average falling below a longer-term average - last occurred between the two averages in December 2007, soon after the market began a decline that eventually took the S&P 500 to 12-year lows in March 2009.

The US dollar fell against the euro, extending Thursday's steep losses, and the price of US Treasuries slipped.

The euro was up 0.30 percent at $1.2554 as investors looked past economic problems in the euro zone and focused on the possibility of a stalled US economic recovery.

Europe's single currency already was bolstered by easing concerns about a tightening of euro-zone liquidity after banks showed a lower need for European Central Bank funding and successful bond auctions on Thursday.

The dollar was down against a basket of major currencies, with the US Dollar Index off 0.27 percent at 84.489, but against the yen, the dollar was up 0.07 percent at 87.66.

Bond prices see-sawed before losing ground as traders scrutinized the payrolls data. Some traders had bet on an even worse result, making the actual showing not so bad by comparison and limiting the upside to Treasury prices.

The benchmark 10-year US Treasury note was down 3/32 in price to yield 2.96 percent.

Japan's Nikkei average ended a touch firmer after choppy trade, rising 0.13 percent to close at 9,203.71, just above the key 9,200 support level, while the MSCI index of Asia Pacific stocks outside Japan fell 0.1 percent.

Crude oil prices fell on Friday. US crude oil futures fell $1.03, or 1.41 percent, to $71.92 a barrel by 12:03 p.m. EDT (1603 GMT). The $71.70 intraday low was the weakest since prices fell to $70.75 on

June 8.

ICE Brent crude oil futures fell 70 cents to $71.64.

Trading sources also noted lighter trading volume ahead of the US Independence Day holiday weekend as a factor in the choppy trading, with volume for US front-month crude only nearing 167,000 at midday in New York.

Prompt US crude has fallen every day this week and is on course for a slide of more than 7 percent on the week, its biggest weekly drop in percentage terms since early May, when the European debt crisis hit markets and prompted a 13 percent drop.

Oil fell more than 3 percent on Thursday, its biggest one-day slide in nearly four weeks, as weak manufacturing data from China and the United States fueled mounting worry that the global economic recovery could stall and even slip back into recession.