GLOBAL MARKETS-U.S. dollar, stocks rally on strong U.S. jobs data

Fri May 3, 2013 3:09pm EDT

* Dow and S&P 500 hit record highs
    * Brent rises above $104
    * U.S. unemployment falls to 4-year low
    * Government debt slumps on strong U.S. jobs report


    By Herbert Lash
    NEW YORK, May 3 (Reuters) - The U.S. dollar surged against
the yen and global equity markets rallied on Friday after the
U.S. government reported jobs growth for April that topped
expectations, driving stocks on Wall Street to record highs.
    U.S. nonfarm payrolls rose by 165,000 last month and the
jobless rate fell to a four-year low of 7.5 percent, the Labor
Department said. Hiring was also much stronger than previously
thought in the prior two months, signs of a resilient jobs
market. 
    Economists expected payrolls to rise by 145,000 and the
unemployment rate to hold steady at 7.6 percent. 
    Leading U.S. and European indexes advanced more than 1
percent in a rally that has boosted the benchmark S&P 500 index
more than 5 percentage points from April lows in just 11
sessions.
    Both the S&P 500 index and the Dow industrials topped key
milestones for the first time, with the S&P 500 breaking through
the 1,600 mark and the Dow surpassing 15,000.
    In a sign of the rally's breadth, the Russell 2000 
index of mid- and small-cap stocks also hit an all-time high.
    Prices of crude oil, copper and other commodities also
rallied as the jobs data raised investor confidence that demand
is growing. Copper, a key industrial metal, surged more than 6
percent. Prices of government debt, a traditional safe haven,
slumped on the data. 
    "The employment number was definitely the trigger for
today's rally," said Michael Korn, president at Skokie Energy in
Princeton, New Jersey.
    The strong jobs data overshadowed an industry report that
showed the pace of growth in the vast U.S. services sector
slowed in April to its weakest pace in nine months.
 
     The Dow Jones industrial average was up 140.83
points, or 0.95 percent, at 14,972.41. The Standard & Poor's 500
Index was up 16.54 points, or 1.04 percent, at 1,614.13.
The Nasdaq Composite Index was up 37.99 points, or 1.14
percent, at 3,378.61. 
    In Europe, the FTSEurofirst 300 of leading shares
rose 1 percent to 1,218.60, the highest close since June 2008.
    MSCI's all-country world equity index rose
0.81 percent to 370.90.
    The dollar rose 1.15 percent against the yen, to 99.08 yen
, on pace for its biggest one-day rise in two weeks, while
the euro rebounded a day after the European Central Bank's
president, Mario Draghi, said the ECB was technically ready for
negative deposit rates. 
    The euro was up 0.34 percent to $1.3107.
    German Bund futures settled down 101 ticks at
146.15, while the benchmark 10-year U.S. Treasury note
 was down 1 3/32 in price to yield 1.7417 percent.
    Brent crude settled $1.34 higher at $104.19 a
barrel, while U.S. crude gained $1.62 to settle at $95.61
a barrel. 
    Benchmark copper on the London Metal Exchange closed
at $7,265 per tonne, up from a close of $6,848 on Thursday. It
rose more than 6 percent, its biggest daily rise since late
October 2011, to hit an intraday high of $7,289 per tonne. 
    Gold traded flat, erasing early gains after
faster-than-expected U.S. job growth, which reduced the need for
the Federal Reserve to immediately boost monetary stimulus.
    "The idea that employment is holding as well as it is in the
face of the fiscal headwinds the economy is currently enduring
is a very positive sign of the economy's underlying fundamental
improvements," said Russell Price, a senior economist at
Ameriprise Financial Services.
    The better jobs data comes just a month after the Bank of
Japan promised to inject about $1.4 trillion into the Japanese
economy to spur growth and end decades of deflation.
    By increasing liquidity, three of the world's major central
banks have fueled a rally in share and bond markets that has
driven many benchmark indexes back up to levels last seen before
the financial crisis began.
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