* Strong U.S. jobs data sparks talk of interest rate hike
* Dollar soars vs euro, yen on jobs data, rate speculation
* Gold falls 4 pct, oil slips below $76 on strong dollar
* Investors ditch bonds as jobs data fuels recovery hopes
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Dec 4 (Reuters) - The U.S. dollar jumped and
global stocks soared on Friday after data showing the United
States shed far fewer jobs last month than expected boosted
hopes the U.S. economy is taking solid steps forward.
But the surprisingly strong report on the U.S. labor market
stoked speculation the Federal Reserve may move to raise
interest rates from record lows sooner than initially thought.
Speculation that rates may head higher crushed commodity
prices and sent prices of government debt on both side of the
Atlantic tumbling after a U.S. Labor Department report showed
only 11,000 jobs were lost in November
.
U.S. gold futures shed 4 percent and were on track for
their biggest one-day percentage loss since February, as the
stronger dollar triggered heavy margin selling.
U.S. stocks see-sawed for much of the day before ending
higher as the job losses were less than an expected 130,000.
The data brightened the outlook for corporate profits as an
improving labor market is considered crucial for recovery.
Economically sensitive sectors like industrials,
technology, consumer and financials put up the day's best
showing on Wall Street. The U.S. unemployment rate also dropped
unexpectedly to 10 percent from October's 10.2 percent.
"The internals of the official non-farm payrolls release
spoke to a much broader improvement in the overall employment
picture," said Peter Kenny, managing director at Knight Equity
markets in Jersey City in New Jersey.
The Dow Jones industrial average <> rose 22.75 points,
or 0.22 percent, at 10,388.90. The Standard & Poor's 500 Index
<.SPX> gained 6.06 points, or 0.55 percent, at 1,105.98. The
Nasdaq Composite Index <> added 21.21 points, or 0.98
percent, at 2,194.35.
Oil prices fell nearly $1 to below $76 a barrel, pressured
by a stronger dollar, which outweighed the U.S. jobs data.
[]
The dollar jumped against the yen and the euro, making
dollar-denominated commodities like crude more expensive for
holders of other currencies, helping pressure prices.
U.S. crude futures <CLc1> fell 99 cents to settle at
$75.47. Brent crude <LCOc1> lost 84 cents to settle at $77.52.
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 1.53 percent at 75.772
from a previous session close of 74.631.
The euro <EUR=> was down 1.44 percent at $1.4851. Against
the yen, the dollar <JPY=> was up 2.49 percent at 90.40.
"The market is pricing in more scope for changes in Fed
policy, meaning, higher interest rates. That's why we're seeing
a rally in the dollar," said Paresh Upadhyaya, senior portfolio
manager at Putnam Investments in Boston.
Bullion investors who recently entered the gold market were
forced to sell to cover margins as prices broke below support
levels, said Bill O'Neill at LOGIC Advisors.
Gold on Thursday had hit a record of $1,226.10 an ounce.
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 Caroline Valetkevitch, Gertrude Chavez-Dreyfuss,
Edward McAllister and Burton Frierson in New York;Joanne
Frearson, Ikuko Kurahone and Emelia Sithole-Matarise in London;
writing by Herbert Lash; Editing by Kenneth Barry)
((herb.lash@thomsonreuters.com; +1 646 223 6019; Reuters
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herb.lash.reuters.com@reuters.net))
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