Brazil stocks fall on risk aversion, profit-taking

SAO PAULO Oct 2 (Reuters) - Brazilian stocks lost ground in early trading on Friday as weaker-than-expected jobs data from the United States prompted risk-averse investors to book profits and seek safer havens.

The benchmark Bovespa index .BVSP fell 1.1 percent to 59,820.67 in morning trading, breaking below 60,000 for the first time since last Friday.

Brazil's currency, the real BRBY, weakened 0.4 percent to 1.794 per U.S. dollar. The greenback is considered a safe haven currency in times of economic uncertainty.

Data released in the morning showed that U.S. employers slashed more jobs than expected in September, pulling unemployment to 9.8 percent. For more see [ID:nN02314318].

The weak job numbers stoked fears that an economic recovery in the world's largest economy is still tenuous at best.

"There was a significant loss of jobs," said Alvaro Bandeira, chief economist with Agora Corretora. "This is one of the last indicators that's going to show improvement."

Morning gains in the dollar, in turn, fueled a drop in commodities. Crude oil CLc1 tumbled 2.22 percent on the jobs data, and the 19-commodity Reuters-Jefferies index .CRB lost 0.49 percent.

The Bovespa index includes a number of heavyweight stocks tied to commodities.

The combination of the weaker-than-expected data and the Bovespa's 61 percent gain so far this year prompted wary investors to book profits, Bandeira noted.

State-controlled energy giant Petrobras (PETR4.SA) lost 0.94 percent to 33.73 reais on the fall in crude.

Mining company Vale (VALE5.SA), the world's largest producer of iron ore, dipped 0.14 percent to 35.62 reais.

Petrobras and Vale are the two most heavily-weighted stocks in the index. The two led losses on on Friday.

Brazilian stocks declined almost across the board.

Among steelmakers, Gerdau (GGBR4.SA) slipped 1.25 percent to 22.82 reais, Usiminas (USIM5.SA) shed 1.27 percent to 45.26 reais and CSN (CSNA3.SA) slid 0.98 percent to 52.40 reais.

Real estate companies had recently shown strong gains as low interest rates and a government program to spur the construction of low income housing lifted hopes for the sector.

Among those companies, Gafisa (GFSA3.SA) declined 2.39 percent to 24.89 reais, Cyrela (CYRE3.SA) moved down 2.61 percent to 21.67 reais and Rossi Residencial (RSID3.SA) fell 2.26 percent to 13 reais.

Banks had gained in past months on low interest rates and a recovery in Brazil's economy, including in the credit markets.

On Friday, Banco do Brasil (BBAS3.SA), Latin America's largest bank by assets, shed 0.5 percent to 30.50 reais and Itau Unibanco (ITUB4.SA), Brazil's largest private sector bank by assets, lost 0.4 percent to 35.79 reais.

Yields on Brazilian interest rate futures contracts <0#DIJ:> largely remained flat, with some medium to long term contracts dipping.

The yield on the contract due January 2011 DIJF1 fell to 10.29 percent from 10.35 percent. The yield on the contract due January 2012 DIJF2 fell to 11.49 percent from 11.55 percent.

The two were among the most highly-traded contracts of the morning. (Reporting by Luciana Lopez; Editing by W Simon)