NEW YORK Global shares edged higher on Friday and Treasury prices tumbled after the U.S. unemployment rate unexpectedly fell to a near four-year low, pointing to improvement in the labor market.
Wall Street, however, erased early gains With the S&P 500 breaking a four-day string of gains, weighed by concerns about the upcoming earnings season, which begins with Alcoa (AA.N) next week.
The dollar advanced to a two-week high versus the yen and the euro gained as investors sold the U.S. and Japanese currencies, which are often perceived as safe havens.
The United States added 114,000 jobs last month, driving the jobless rate down to 7.8 percent, its lowest since January 2009, the Labor Department reported. Payroll gains for both July and August were revised higher.
"The details were about as good as they realistically could be under the circumstances," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.
The MSCI global stock index .MIWD00000PUS rose 0.3 percent to 336.55.
The Dow Jones industrial average .DJI ended up 34.79 points, or 0.26 percent, to 13,610.15. The Standard & Poor's 500 Index .SPX closed down 0.47 points, or 0.03 percent, to 1,460.93. The Nasdaq Composite Index .IXIC dropped 13.27 points, or 0.42 percent, to 3,136.19.
The S&P 500 is still up 16.4 percent so far this year. The benchmark is on track for its best yearly run since 2009 when stocks rebounded after the financial crisis.
"The speed with which the market will get overbought on continued strength may pose a problem," said Ralph Edwards, director of derivatives strategy at ITG in New York.
"The market never had a truly ugly day since the highs registered on September 14th."
Europe's FTSEurofirst 300 index .FTEU3 rallied 1 percent to close at 1,111.65.
European markets had risen earlier after reassurance from the European Central Bank on Thursday that it stood ready to buy Spain's bonds if it requested aid. The ECB also said Europe had a "fully effective backstop mechanism in place" to protect the euro.
The ECB envisions buying large volumes of sovereign debt for periods of one to two months once its bond-buying program is triggered, senior central bank sources told Reuters.
The dollar rose to 78.87 yen, the highest since September 19, before pulling back to 78.62 yen, up 0.2 percent on the day. The euro rose 0.1 percent to $1.3029.
Safe-haven government bond prices fell. The benchmark 10-year U.S. Treasury note was down 18/32, with the yield at 1.7341 percent.
"Treasuries sank after the jobs report," said Cary Leahey, economist and senior advisor to Decision Economics in New York.
"Though September job growth was close to expectations, several facets of the report, particularly the large drop in the unemployment rate to 7.8 percent, suggested that the Fed was closer to the exit window," he said, referring to the Federal Reserve's program of unconventional monetary easing.
Brent futures lost 56 cents to settle at $112.02 a barrel. U.S. crude futures eased $1.83 to settle at $89.88 per barrel, after climbing nearly 4 percent in the prior session.
Gold retreated from an 11-month high as the jobs data dampened its appeal as an inflation hedge. Spot gold rose above $1,795 an ounce earlier, the highest since November, and was last down slightly at around $1,781.