February 1, 2019 / 3:10 PM / 3 months ago

US STOCKS-S&P near 8-week high after upbeat jobs data; Amazon results weigh

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* Amazon drops as sales forecast misses estimates

* Cigna's outlook, proposed rebate rule hit healthcare stocks

* January payrolls rise more than expected

* Indexes: Dow up 0.26 pct, S&P flat, Nasdaq off 0.33 pct (Updates to open)

By Sruthi Shankar

Feb 1 (Reuters) - The S&P 500 held near an eight-week high on Friday as stronger-than-expected U.S. job growth in January allayed concerns about a slowdown, although disappointing outlook from e-commerce giant Amazon capped gains.

The Labor Department data showed nonfarm payrolls jumped by 304,000 jobs last month, the largest gain since February 2018, handily beating an estimated rise of 165,000, according to economists polled by Reuters.

The report also showed no "discernible" impact on job growth from a 35-day partial government shutdown. However, the longest shutdown in history, which ended a week ago, pushed up the unemployment rate to a seven-month high of 4 percent.

The data came two days after the Federal Reserve signaled that its three-year interest rate hike campaign might be ending because of rising headwinds to the economy.

"The payroll number was significantly stronger than what was expected, so a lot more people are finding jobs," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

"There is a huge concern about the growth rates in China and this certainly eases some amount of concern domestically."

Data from China showed that the manufacturing sector shrank for the second straight month in January, pointing to further strains on the economy that could heighten risks for global growth.

January ended on a high-note for U.S. markets, with the S&P 500 posting its best month since 2015, boosted by the Fed's dovish remarks and as hopes of a U.S.-China trade deal improved.

President Donald Trump said he would meet Chinese President Xi Jinping soon to try and seal a comprehensive trade deal.

At 9:58 a.m. ET the Dow Jones Industrial Average was up 64.67 points, or 0.26 percent, at 25,064.34, the S&P 500 was down 1.69 points, or 0.06 percent, at 2,702.41 and the Nasdaq Composite was down 23.97 points, or 0.33 percent, at 7,257.77.

Six of the 11 major S&P sectors were lower, dragged down by a 1.4 percent loss for the S&P consumer discretionary index .

Amazon.com Inc fell 4.1 percent after its quarterly sales forecast fell short of Wall Street estimates, overshadowing its record sales and profit during the holiday season.

Exxon Mobil Corp and Chevron Corp jumped 2.4 percent after the oil majors reported better-than-expected quarterly profits, boosting the Dow Jones industrial index.

The S&P energy index rose 1.1 percent, led by higher oil prices and upbeat earnings in the sector.

Cigna Corp fell 3.7 percent after the health insurer forecast 2019 revenue and earnings below estimates.

The insurer's shares, along with other pharmacy benefit managers, took a hit after the U.S. government proposed a rule to end the industry-wide system of rebates, which they get from drugmakers, in efforts to lower the cost of prescription drugs for consumers.

CVS Health Corp fell 1.9 percent and UnitedHealth Group Inc slipped 1.4 percent, dragging the S&P healthcare index down 0.3 percent.

Declining issues outnumbered advancers for a 1.01-to-1 ratio on the NYSE. Advancing issues outnumbered decliners for a 1.02-to-1 ratio on the Nasdaq.

The S&P index recorded 22 new 52-week highs and no new lows, while the Nasdaq recorded 24 new highs and 8 new lows. (Reporting by Sruthi Shankar, additional reporting by Medha Singh and Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta)

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