Stocks, dollar fall on weak U.S. jobs data

NEW YORK Fri Apr 5, 2013 4:44pm EDT

1 of 3. Traders work on the floor at the New York Stock Exchange, April 1, 2013.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - Major stock markets tumbled and the dollar fell on Friday, after a weaker-than-expected jobs report added to fears the U.S. economic recovery may be losing steam, driving a bid for safety that boosted prices of U.S. Treasury securities and gold

Brent crude oil fell to an eight-month low as the bleak U.S. jobs data dimmed the outlook for fuel demand in the world's largest oil consumer.

U.S. employers hired at the slowest pace in nine months in March, adding just 88,000 nonfarm jobs, the Labor Department said, below an expected 200,000. The jobless rate ticked a tenth of a point lower to 7.6 percent, but the drop was largely due to people dropping out of the work force.

"The report will fuel concerns about another spring swoon for the economy, the adverse impact of Congressional dysfunction, and more generally, the weak underlying dynamism of the economy," said Mohamed El-Erian, co-chief investment officer at Pacific Investment Management Company.

The report followed a string of disappointing data this week on activity in the U.S. manufacturing and services sectors and on private-sector hiring, raising concern the recent rally in equities has outrun economic fundamentals.

Japanese shares climbed to near a five-year high overnight, with the market in Tokyo closing before the U.S. jobs data was announced, a day after the Bank of Japan took bold monetary easing measures to fight deflation. Tokyo's Nikkei stock average .N225 jumped 4.7 percent, topping 13,000 points for the first time since August 2008.

The yen sank to its weakest level in more than 3-1/2 years against the dollar, and benchmark 10-year Japanese government bond yields fell to a record low of 0.315 percent. The yen, down 3.5 percent this week against the dollar, posted its worst week since December 2009. Against the euro, the yen saw its largest weekly loss since November 2008, down about 5 percent.

The MSCI world stocks index .MIWD00000PUS slipped 0.3 percent on the day to 355.36 points.

U.S. stocks ended their worst week this year with losses on Friday after the jobs data undermined confidence in the economy and first-quarter earnings. The U.S. quarterly, corporate earnings season will start up next week.

The Dow Jones industrial average .DJI dropped 40.86 points, or 0.28 percent, to close at 14,565.25. The Standard & Poor's 500 Index .SPX dropped 6.70 points, or 0.43 percent, to end at 1,553.28. The Nasdaq Composite Index .IXIC dropped 21.12 points, or 0.66 percent, to 3,203.86.

For the week, the Dow fell 0.1 percent, the S&P lost 1 percent and, the Nasdaq dropped 1.9 percent.

European shares .FTEU3 tumbled 1.5 percent, the biggest daily fall of the year, to close at 1,162.21 points.

BONDS RALLY

The dollar .DXY fell 0.2 percent against a basket of major currencies to 82.497, on expectations the Federal Reserve will continue its bond-buying program, known as quantitative easing. The euro rose 0.6 percent to $1.3004.

"The market is assured that the Fed will not be taking its foot off the QE gas pedal anytime soon," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.

"This number is seeing follow-through in dollar weakness, and I expect that to continue against all countries who are not embarking on QE of their own."

The dollar was last up 1.3 percent at 97.57 yen, having risen to 97.83, the strongest since June 2009. The euro rallied 1.8 percent to 126.85 yen.

U.S. Treasuries rallied and yields fell to their lowest levels of the year. Weaker global equity markets, the Bank of Japan's monetary stimulus program, and escalating tension in the Korean peninsula also encouraged investors to buy bonds.

The benchmark 10-year Treasury note was 17/32 higher after the report, driving its yield down to 1.706 percent.

The price of the 30-year Treasury bond rose 2-22/32, pushing its yield down to 2.858 percent from 2.99 percent late on Thursday.

German Bund futures extended gains to hit their highest level since June 2012 at 146.54, up 58 ticks on the day.

Brent crude fell $2.22 to settle at $104.12 a barrel. U.S. crude dropped 56 cents to settle at $92.70.

Spot gold rose to $1,578 an ounce from $1,552.71.

(Additional reporting by Ryan Vlastelica, Gertrude Chavez-Dreyfuss and Ellen Freilich; Editing by Leslie Adler)

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Comments (2)
CF137 wrote:
“Nikkei soars on BOJ”….hilarious.
I guess people over there aren’t smart enough yet to figure out this move will extremely devalue the Yen.

Apr 04, 2013 11:16pm EDT  --  Report as abuse
staff3 wrote:
‘weaker-than-expected jobs report ‘

There is a simple solution to poor US job creation. Show me a country with weak or ineffective property rights and I’ll show you a country with a weak economy and high unemployment. It’s that simple.

Just because they call it “reform” doesn’t mean it is.

“patent reform”…America Invents Act, vers 1.0, 2.0, 3.0…

“This is not a patent reform bill” Senator Maria Cantwell (D-WA) complained, despite other democrats praising the overhaul. “This is a big corporation patent giveaway that tramples on the right of small inventors.”

Senator Cantwell is right. All these bills do is legalize theft. Just because they call it “reform” doesn’t mean it is. The paid puppets of banks, huge multinationals, and China continue to brain wash and bankrupt America.

They should have called these bills the America STOPS Inventing Act or ASIA, because that’s where they’re sending all our jobs.

The patent bill (vers 2, 3, etc) is nothing less than another monumental federal giveaway for banks, huge multinationals, and China and an off shoring job killing nightmare for America. Even the leading patent expert in China has stated the bill will help them steal our inventions. Congress passed it and Obama signed it. Who are they working for??

Patent reform is a fraud on America. Congress and Obama are both to blame. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and destroying their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. They have already damaged the US patent system so that property rights are teetering on lawlessness. This bill will only make it harder and more expensive for small firms to get and enforce their patents. Without patents we cant get funded. In this way large firms are able to play king of the hill and keep their small competitors from reaching the top as they have. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale destroyer of US jobs. Those wishing to help fight this bill should contact us as below.

Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Congress and Obama tinkering with patent law while gagging inventors is like a surgeon operating before examining the patient.

Those wishing to help fight big business giveaways and set America on a course for sustainable prosperity, not large corporation lobbied poverty, should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.

Please see http://truereform.piausa.org/default.html for a different/opposing view on patent reform.
http://docs.piausa.org/
http://washingtonexaminer.com/patent-reform-like-most-reforms-in-the-end-benefits-the-biggest-guys-with-the-best-lobbyists/article/2524033
http://www.hoover.org/publications/defining-ideas/article/142741

Apr 06, 2013 11:03am EDT  --  Report as abuse
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