By Chuck Mikolajczak

NEW YORK (Reuters) -U.S. job growth slowed in May, while the unemployment rate held steady, potentially giving the Federal Reserve a buffer to delay the resumption of interest rate cuts.

Nonfarm payrolls increased by 139,000 jobs last month after rising by a downwardly revised 147,000 in April, the Labor Department said on Friday.

Economists polled by Reuters had forecast 130,000 jobs added last month after a previously reported 177,000 advance in April.

The unemployment rate held steady at 4.2% and matched expectations.

MARKET REACTION:

STOCKS: S&P 500 E-minis added to gains and were up 51.25 points, or 0.86%

BONDS: The yield on benchmark U.S. 10-year notesrose 6.5 basis points to 4.46%, the two-year note yield climbed 6.9 basis points to 3.993%FOREX: The dolla

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