* U.S.-exposed retailers worst performers
* Weak U.S. jobs could delay Fed tapering, boost stocks-
analyst
* Euro zone business activity strong in Aug - PMI
* STOXX 600 ends the week flat
(Updates to market close)
By Ambar Warrick and Sruthi Shankar
Sept 3 (Reuters) - European stocks slipped on Friday as U.S.
employment data pointed towards slowing growth in the world's
largest economy, with retail and travel stocks exposed to
American markets suffering the most.
The pan-European STOXX 600 index slipped 0.6%,
marking its worst fall in two weeks after data showed the U.S.
economy created the fewest jobs in seven month in August. Global
equities also tumbled after the data.
Retail stocks were among the worst performers for
the day, dropping 0.9%. Bookseller WH Smith, which
makes at least a quarter of its earnings from U.S. customers,
was the worst performer in the sector, down 3.4%.
Travel stocks sank 1%.
The laggard U.S. data was attributed to a rise in the highly
contagious Delta variant of the coronavirus. But analysts saw a
bright side in the reading, specifically that weakness in the
job market would give less impetus to the Federal Reserve to
rein in liquidity measures.
"Friday's weaker-than-expected jobs puts less pressure on
the Fed to taper its stimulus, which is likely to provide a
short-term boost for stocks. The stock market loves stimulus and
any indication that the Fed will remain fully accommodative is
good news for investors," said Jay Pestrichelli, CEO of ZEGA
Financial.
European technology stocks were the best performers
for the week, up nearly 2% as investors fled to sectors most
resilient to disruptions caused by the pandemic.
A private survey also showed activity in China's services
sector contracted sharply in August as restrictions to curb the
COVID-19 Delta variant threatened to derail the recovery.
But euro zone business activity remained strong last month,
IHS Markit's survey showed, suggesting the bloc's economy could
be back to pre-COVID-19 levels by year-end despite fears about
the Delta variant of the coronavirus and widespread supply chain
issue.
The European Central Bank will meet next week amid calls
from several hawkish members to slow down its pandemic-era
purchases programme. A Reuters poll sees the bank announcing a
cut to its asset purchases, given a recent spike in inflation.
Payments company Nexi slipped 0.8% after Italy's
competition watchdog said it had opened an investigation into
the company's planned merger with domestic rival SIA.
Spanish fund distribution firm Allfunds jumped
11.7%, and was the best performer on the STOXX 600 after its
maiden first-half results beat expectations.
German exchange operator Deutsche Boerse is
expected to announce new entrants to the blue-chip DAX index
on Friday, part of the index's biggest ever overhaul.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb
Chakrabarty and Angus MacSwan)