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US STOCKS-Jobs report lifts Wall Street; S&P 500 still tracks worst week in six

By Medha Singh

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* Nonfarm payrolls increase by 136,000 in Sept

* August payrolls revised up to 168,000 from 130,000

* Apple rises on report of ramp up in iPhone production

* HP Inc falls after announcing $1 bln charge from restructuring

* Indexes up: Dow 0.68%, S&P 0.68%, Nasdaq 0.74% (Updates to open)

By Medha Singh

Oct 4 (Reuters) - U.S. stocks rose on Friday as moderate jobs growth in September offered some relief from a spate of dismal economic data this week that has rankled markets and fueled concerns that the United States was sliding into a recession.

The Labor Department's report showed nonfarm payrolls increased by 136,000 last month and unemployment rate dropped to near a 50-year low, but manufacturing payrolls declined for the first time in six months.

"It's sort of a Goldilocks report: it's not strong enough to move the Federal Reserve away from cutting rates at the end of October, but it's not weak enough to make you concerned about the labor market or the consumer," said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management in New York.

Bets of another interest rate cut by the Federal Reserve have soared this week as U.S. factory activity contracted, private sector hiring cooled and service sector activity fell.

Traders currently see a 76% chance for the central bank to lower borrowing costs at its policy meeting later this month, from 40% on Monday. The Fed had cut rates in September and said that future reductions would be "data-dependent".

Still, a sharp selloff this week has put the S&P 500 on course for its worst week in six, while the Dow was headed for its biggest weekly drop in two months.

Shares of Apple Inc rose 1.9%, providing the biggest boost to all three indexes, after a report that the company would ramp up production of iPhone 11 models.

At 10:15 a.m. ET, the Dow Jones Industrial Average was up 176.96 points, or 0.68%, at 26,378.00, the S&P 500 was up 19.85 points, or 0.68%, at 2,930.48. The Nasdaq Composite was up 57.91 points, or 0.74%, at 7,930.18.

HP Inc tumbled 8.7% after the PC maker said it would cut up to 16% of its workforce as part of a restructuring plan that would result in an overall charge of $1 billion.

Investors will also keep an eye on U.S. central bank chief Jerome Powell's remarks on Friday for clues on what the Fed would do at its policy meeting later this month. He is due to speak at 2:00 p.m. ET (1800 GMT) in Washington.

Advancing issues outnumbered decliners by a 1.74-to-1 ratio on the NYSE and a 1.55-to-1 ratio on the Nasdaq.

The S&P index recorded 10 new 52-week highs and one new low, while the Nasdaq recorded six new highs and 23 new lows. (Additional reporting by Sinead Carew in New York; Editing by Sriraj Kalluvila and Arun Koyyur)