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A weaker jobs report on Friday brought slight relief over diminished chances of a September rate hike. 

The higher likelihood of accommodative rates for longer pushed benchmark indexes to clock modest gains. The S&P 500 was up 0.42%, the Dow Jones Industrial Average added 0.39%, and the Nasdaq rose 0.43%.

The U.S. created 151,000 jobs in August, below consensus of 180,000 jobs. The unemployment rate held firm at 4.9%. Analysts expected the rate to dip to 4.8%.

"Today's payroll numbers came in light and did nothing to improve the debate on whether or not the Feds going to hike interest rates in September," Rick Keller, chairman of the board at First Foundation, told TheStreet. "The stock market initially has reacted positively but I think it is a "Oh what a relief" rally, not renewed strength in the economy."

The chances of a September hike in interest rates from the Fed currently sit at 21%, according to CME Group Fed funds futures. September's chances were at 24% before the jobs report. A December hike has greater odds at 46%, up from 42% a day earlier.

But comments from Fed members on Friday remained hawkish. Richmond Fed President Jeffrey Lacker said on Friday afternoon that higher interest rates would be warranted unless the labor market sees a significant slowdown in coming months.

"It appears that the funds rate should be significantly higher than it is now," he said in remarks to economists in Richmond. Lacker isn't a voting member on the Federal Open Market Committee.

Crude oil moved off highs during the day as drilling activity in the U.S. rose for its ninth time in 10 weeks. Baker Hughes reported the U.S. oil rig count rose by one to 407 over the past week. Worries over ballooning domestic supply have recently pressured commodities.

Oil remained in the green, though, on earlier comments from Russian President Vladimir Putin which suggested support for a production freeze agreement between Organization of Petroleum Exporting Countries and other non-OPEC members. Putin said Iran could be exempted in order for a deal to pass. Iranian has shown reluctance to slow down output so soon after sanctions imposed on it were lifted.

West Texas Intermediate crude oil closed 2.53% higher at $44.25 a barrel.

Factory orders in the U.S. rose 1.9% in July, slightly weaker than an expected 2% gain. However, the reading was far better than a 1.8% decline in June.

The U.S. trade balance deficit shrank 11.6% to $39.5 billion in July, according to the U.S. Census Bureau. Analysts had expected the deficit to narrow at a slower pace to $41.3 billion.

Lululemon (LULU - Get Report) tumbled 10% after reporting in-line quarterly earnings and issuing a soft outlook. The yoga apparel chain earned an adjusted 38 cents a share, as analysts expected, while revenue of $514.5 million fell short of estimates. Third-quarter earnings guidance of 42 cents to 44 cents a share was on the weaker side of consensus. Chief Financial Officer Stuart Haselden said, "Traffic continued to be a headwind, and those headwinds extended into the third quarter."

Gunmaker Smith & Wesson (SWHC) fell 6.% despite a better-than-expected quarter. Adjusted first-quarter earnings of 62 cents a share and revenue of $207 million beat consensus of 54 cents and $198.2 million. Second-quarter earnings guidance of 53 cents to 57 cents a share came in far higher than a targeted 36 cents.

Ambarella (AMBA - Get Report) was 6.7% lower despite after topping profit and sales guidance in its second quarter. Earnings of 54 cents a share came in 16 cents more than estimated, while revenue of $65.1 million beat by nearly $1 million.

Hewlett Packard Enterprise (HPE - Get Report) was up less than 1% on reports it is considering a sale of its software business. The tech company is reportedly in negotiations with private-equity firm Thoma Bravo to sell the unit for between $8 billion and $10 billion, Reuters reported. The company has already received offers as high as $7.5 billion.

Ciena (CIEN - Get Report) was downgraded to equal weight at Morgan Stanley and to hold from buy at Drexel Hamilton on Friday. Both firms said the move was a valuation call after a mixed earnings report a day earlier.