Stocks were trading lower by mid-afternoon Friday as investors tried to make sense of a stellar jobs report and what it might mean for the chances of a December rate hike.

The S&P 500 fell 0.4%, the Dow Jones Industrial Average slid 0.11%, and the Nasdaq was flat. The indices shifted between negative and positive repeatedly Friday morning.

Investors took the stronger-than-expected jobs report as both a blessing and a curse. On the one hand, it shows that the U.S. economy is back on the growth track after several months of weakness. On the other, this makes a December rate hike even more likely, especially after Federal Reserve Chair Janet Yellen made clear earlier in the week that at the next meeting there is a "live" possibility for an increase.

This month's report had taken on added significance as one of the two the Fed will have to analyze before a rates decision is made in December. 

"The much bigger-than-expected ... surge in nonfarm payrolls in October confirms that the weakness in August and September was just a temporary blip and, given the circumstances, a December interest rate hike would now appear to be the most likely outcome," said chief U.S. economist at Capital Economics Paul Ashworth.

Deals news made trading interesting on Friday. ZS Pharma (ZSPH) spiked 40.9% after AstraZeneca (AZN) - Get Report agreed to buy the drugmaker for $2.7 billion. The offer of $90 a share marks a 42% premium to ZS Pharma's Thursday close.

Alibaba (BABA) - Get Report and Chinese streaming company Youku Tudou (YOKU) have agreed to a merger. The Chinese e-commerce company will pay $27.60 per Youku American Depositary Share, a 35% premium to its closing price in mid-October. The deal is expected to close in the first quarter of next year. Youku shares jumped 8.1% on the news.

Earnings reports were also causing waves. Walt Disney (DIS) - Get Report shares climbed after the world's largest entertainment company posted a 7% increase in profit driven by stronger demand at its resorts. 

DreamWorks Animation (DWA)  added 16.1% after the DVD release of children's movie Home helped to boost profits in its recent quarter. The media company posted a surprise profit of 2 cents a share. Analysts had expected a loss of 5 cents a share.

Take-Two Interactive (TTWO) - Get Report  moved more than 6% higher after the video game retailer upped its full-year outlook on strong sales of its popular titles such as Grand Theft Auto and NBA 2K. The company expects full-year profit between $1 and $1.15 a share, up from a previous range of 75 cents to $1 a share.

Graphics chipmaker Nvidia (NVDA) - Get Report jumped more than 14% after a better-than-expected quarter. The company earned 46 cents a share, 11 cents above estimates, on revenue of $1.3 billion, above forecasts of $1.18 billion.

Men's Wearhouse (MW) tanked 43% after the suit retailer cut its outlook for the third quarter to between 46 cents and 51 cents a share, down from the 87 cents a share previously forecast. The company blamed the lower guidance on weaker sales at Jos. A. Bank, the retail chain it acquired last year.