* Stocks rise on surprisingly strong U.S. labor report
* Dollar surges as U.S. sheds fewer-than-expected jobs
* Oil slips below $76 a barrel on supply worries
* Investors ditch bonds as jobs data fuels recovery hopes
(Updates with U.S. markets, changes byline, dateline
previously LONDON)
By Herbert Lash
NEW YORK, Dec 4 (Reuters) - Global stocks rose and the U.S.
dollar soared on Friday after data showed the United States
shed far fewer jobs last month than expected, boosting hopes
recovery is picking up in the world's largest economy.
Prices for government debt tumbled on both sides of the
Atlantic as the U.S. Labor Department reported just 11,000 jobs
were lost in November, fueling recovery hopes and sapping
demand for safe-haven bonds. For details, see: []
[]
But U.S. stocks clung to modest gains as investors wrestled
with the prospect that the U.S. Federal Reserve might need to
raise interest rates, which have hovered at historic lows to
help foster economic growth. []
Oil prices fell below $76 a barrel, reversing earlier
gains, as the stronger dollar and tentative U.S. equity market
outweighed the early positive reaction from the jobs data.
[]
Struggling U.S. stocks also reflected the unwinding of the
so-called carry trade, where investors bought the low-yielding
U.S. dollar to buy dollar-based assets, such as equities.
"The dollar is getting stronger ... and we're seeing a
reversal today" in the gold market, said Robert Francello, head
of equity trading for Apex Capital in San Francisco.
Gold slid below $1,180 a troy ounce, pulled down by the
dollar's strength and the jobs data, which raised sentiment on
economic growth and dented gold as a currency hedge.
[]
Gold on Thursday had hit a record peak of $1,226.10 an
ounce.
Shortly after 1 p.m. the Dow Jones industrial average
<> was up 22.75 points, or 0.22 percent, at 10,388.90. The
Standard & Poor's 500 Index <.SPX> was up 4.81 points, or 0.44
percent, at 1,104.73. The Nasdaq Composite Index <> was up
14.24 points, or 0.66 percent, at 2,187.38.
FANTASTIC DATA
In Europe, shares hit a two-week closing high on the jobs
data. The pan-European FTSEurofirst 300 <> index of top
shares ended up 1.1 percent at 1,025.77 points.
The U.S. labor data -- financial markets had expected a
loss of 130,000 jobs -- initially lifted markets.
"It is fantastic. It is positive for the wider economy and
everyone is coming in to buy equities," said Joshua Raymond,
market strategist at City Index, referring to the jobs data.
Oil reversed course after an initial surge.
U.S. light sweet crude oil <CLc1> fell 65 cents, or 0.85
percent, to $75.81 a barrel.
"The early rally here is being tempered by considerations
of the overhang in petroleum supplies," said Gene McGillian,
analyst at Tradition Energy in Stamford, Connecticut.
"In any case, the oil market is looking at the dollar and
its movement at this point could likely lead to a test of crude
support at $75," McGillian said.
The dollar gained from the surprisingly strong jobs report
as it fed speculation the Federal Reserve may soon have to
consider raising interest rates from record lows, which would
increase returns on dollar assets.
The dollar broke above 90 yen for the first time in three
weeks and was on track for its best day against the Japanese
currency since August. The euro fell below $1.49 and headed for
its biggest one-day decline since July.
The dollar was up against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 1.21 percent at 75.532.
The euro <EUR=> was down 1.19 percent at $1.4889. Against
the yen, the dollar <JPY=> was up 2.03 percent at 89.99.
Bond yields, which have remained low on the view that the
weak economy and poor jobs outlook will damp inflation and
prevent the Federal Reserve from raising interest rates,
jumped. That notion could now be at risk.
"Treasury market yields are soaring right now because if
the economy is going to see sustainable growth, the day is
nearing when the Fed will have to make good on its plans for an
exit strategy," said Chris Rupkey, chief financial economist at
Bank of Tokyo/Mitsubishi UFJ in New York.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 27/32 in price to yield 3.48 percent.
Asian shares rebounded this week after steep losses the
week before over worries about Dubai's debt problems. MSCI's
Asia index excluding Japan <.MIAPJ0000PUS> fell 0.6 percent on
Friday.
In Japan, the Nikkei <> rose 0.45 percent, topping
10,000 for the first time in five weeks as the benchmark gained
10.4 percent for the week, its biggest weekly gain in a year.
(Reporting by Ellis Mnyandu, Steven C. Johnson, Burton
Frierson in New York;Joanne Frearson, Ikuko Kurahone and Emelia
Sithole-Matarise in London; writing by Herbert Lash; Editing by
Andrew Hay)
((herb.lash@thomsonreuters.com; +1 646 223 6019; Reuters
Messaging:
herb.lash.reuters.com@reuters.net))
((Multimedia versions of Reuters Top News are now available
for: * 3000 Xtra: visit
http://topnews.session.rservices.com
* BridgeStation: view story .134
For more information on Top News:
http://topnews.reuters.com))
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge
Fund Blog click on http://blogs.reuters.com/hedgehub)
