GLOBAL MARKETS-Shares, crude oil dip despite stronger US jobs

Fri Nov 2, 2012 12:01pm EDT

* Wall Street, crude oil retreat after surprisingly strong jobs data

* Dollar advances near 3-week high versus euro

* U.S. Treasuries fall as U.S. job growth hurts safety bid

By Herbert Lash

NEW YORK, Nov 2 (Reuters) - Global stocks and crude oil slipped on Friday even after a U.S. employment report for October surpassed expectations, as investors looked beyond next week's presidential election to the looming "fiscal cliff."

The dollar climbed to a more-than-six-month peak against the yen and a three-week high versus the euro after U.S. employers stepped up hiring and the unemployment rate ticked higher as more workers renewed job hunts, a hopeful sign for the economy.

But other data highlighted a mixed picture. Demand for U.S. factory goods rose in September by the most in over a year, but a gauge of business investment plans showed lackluster momentum in the recovery despite a slight upward revision.

"The (jobs) report itself was good but just not good enough, especially after the pre-rally we had yesterday," said Todd Schoenberger, managing principal at the BlackBay Group in New York, referring to the 1.1 percent surge in the broad-based S&P 500 index on Thursday, its best gain since Sept. 13.

The employment data was the last major report card on the U.S. economy before Tuesday's presidential election. Polls show President Obama and Republican Mitt Romney locked in a dead heat in a race that may hinge on the nation's feeble jobs market.

"With the election next week and the outcome of that still so uncertain, some modest downward pressure is to be expected for the rest of the day," Schoenberger said.

Much of Thursday's rally was rooted in the belief that significant East Coast storm damage will force capital spending, rebuilding and help boost employment far more quickly than was thought a week ago, Andrew Wilkinson, chief economic strategist at Miller Tabak & Co, told clients.

But Wilkinson said that the so-called fiscal cliff -- when higher tax rates and cuts in government spending are scheduled to begin early next year if Congress fails to act -- has made investors reluctant to buy further into the rally.

The Dow Jones industrial average was down 37.13 points, or 0.28 percent, at 13,195.49. The Standard & Poor's 500 Index was down 1.81 points, or 0.13 percent, at 1,425.78. The Nasdaq Composite Index was down 8.57 points, or 0.28 percent, at 3,011.49.

In Europe, the FTSEurofirst 300 index of top European shares was up 0.3 percent at 1113.46.

The MSCI all-country equity index of world shares slipped 0.1 percent at 331.48.

Oil fell as weak European data reinforced a gloomy picture for the demand outlook. Euro zone manufacturing shrank for the 15th month running in October as output and new orders fell, a survey showed.

Weak growth, high prices and better vehicle fuel efficiency pushed down fuel consumption in most of Western Europe over the summer, official statistics showed.

Brent crude for December fell $1.22 cents to $106.95 a barrel, while U.S. crude for December was down $1.77 at $85.32.

The U.S. dollar index was up 0.65 percent at 80.567, and the euro was down 0.80 percent at $1.2838.

The benchmark 10-year U.S. Treasury note was down 3/32 in price to yield 1.7383 percent.

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