GLOBAL MARKETS-Dollar tumbles, shares gain after weak U.S. jobs data

Tue Oct 22, 2013 12:14pm EDT

* U.S. jobs data misses expectations, 148,000 vs 180,000
estimate
    * Dollar slides to two-year low vs euro
    * Stocks climb on expectations Fed's bond buying good into
2014
    * Brent crude rises on news of U.S.-Saudi rift over Mideast


    By Herbert Lash
    NEW YORK, Oct 22 (Reuters) - The dollar slid to a two-year
low against the euro and global equity markets rose for a fifth
session in a row on Tuesday after weak U.S. jobs data reinforced
expectations the Federal Reserve will keep its easy-money policy
intact into 2014.
    U.S. Treasuries yields fell to the lowest in three months on
the jobs data. 
    Nonfarm payrolls increased 148,000 in September, the Labor
Department said in a report delayed by the 16-day shutdown of
the federal government. The total was far lower than economists'
estimates of 180,000 new jobs. 
    Even though the job count for August was revised to show
more positions created than previously reported, employment
gains in July were the weakest since June 2012.
    Economists and market analysts said the tepid pace of U.S.
job growth supported the Federal Open Market Committee's
decision in September not to begin paring back its purchases of
$85 billion a month in bonds to bolster the economy.
    "Today's underperforming jobs number fully justifies
September's cautious FOMC," said Joseph Trevisani, chief market
strategist at WorldWideMarkets in Woodcliff Lake, New Jersey.
    "Dollar bulls will be discomfited but equities will find the
economic logic invigorating," he said.
    Stocks rose on Wall Street, in Europe and elsewhere in the
Americas after the jobs report. The euro jumped and the dollar
index slipped, while government debt prices rose on both sides
of the Atlantic, pushing yields lower.
    Equities later pared some gains, and the tech-rich Nasdaq
composite index briefly slipped into negative territory.  
    MSCI's all-country stock index, which tracks
stocks in 45 countries, rose 0.63 percent to levels last seen in
January 2008. The FTSEurofirst 300 of leading European
shares rose 0.49 percent to close at a provisional 1,287.32. 
    On Wall Street, the Dow Jones industrial average was
up 61.10 points, or 0.40 percent, at 15,453.30. The Standard &
Poor's 500 Index was up 8.40 points, or 0.48 percent, at
1,753.06. The Nasdaq Composite Index was up 7.23 points,
or 0.18 percent, at 3,927.28. 
    The euro hit a high of $1.3748 against the dollar,
its strongest level since Nov. 14, 2011, in early New York
trading. It was last at $1.3776, up 0.69 percent.
    Against the yen, the dollar fell as low as 97.86
 was last down 0.02 percent at 98.16 yen in choppy trade.
    The dollar index, a basket of six major trading
currencies, was down 0.52 percent.
    "This really does push us into a January, February mode (for
Fed tapering) and if there is a shutdown, possibly even
further," said Aaron Kohli, an interest rate strategist at BNP
Paribas in New York, referring to another U.S. political
standoff in early 2014.
    Benchmark 10-year notes were last up 23/32 in
price to yield 2.5251 percent, the lowest since July 24. 
    German Bund futures hit two-week highs, closing 63
ticks higher on the day at 140.54, while yields on German
10-year government debt  fell below 1.80 percent.
    "This report definitely gives the Fed pause. It keeps QE
alive and bonds will like it and so might stocks. This is
positive for all asset prices," said Craig Dismuke, chief
economic strategist with Vining Sparks in Tennessee.
    Brent crude oil rose above $110 per barrel, pulling its
premium above U.S. light crude to the widest in six months,
after news of a deterioration in relations between the United
States and key OPEC oil producer Saudi Arabia.
    Brent for December was up 34 cents a barrel at
$109.98. U.S. crude futures slipped 72 cents to $98.50 a barrel.
    The most active gold futures contract on New York's
COMEX was up 2 percent at $1,342.80 an ounce. 
    European equities set five-year highs in a broad-based rally
spurred by the jobs report and corporate results that beat
analysts' estimates.
    Norwegian insurer Gjensidige jumped 8 percent on
third-quarter earnings that beat forecasts and a surprise
special dividend. UK consumer goods firm Reckitt Benckiser Group
 rose 5.2 percent after reporting higher revenue and
saying it was reviewing options for its pharmaceuticals unit.
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