October 22, 2013 / 2:48 PM / 4 years ago

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

4 Min Read

* U.S. jobs data misses expectations, 148,000 vs 180,000
    * Dollar slides to two-year low vs euro, rebounds against
    * Stocks climb on expectations Fed's bond buying good into
    * Oil 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 a measure of 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.
    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.
jobs growth supported the Federal Open Market Committee's
decision in September not to begin paring back its monthly
purchases of $85 billion a month 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 opened higher on Wall Street, following gains 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.
    MSCI's all-country stock index, which tracks
stocks in 45 countries, rose 0.76 percent to levels last seen in
January 2008. The FTSEurofirst 300 of leading European
shares rose 0.71 percent to 1,290.24. 
    The Dow Jones industrial average was up 74.95 points,
or 0.49 percent, at 15,467.15. The Standard & Poor's 500 Index
 was up 9.45 points, or 0.54 percent, at 1,754.11. The
Nasdaq Composite Index was up 5.16 points, or 0.13
percent, at 3,925.21. 
    In early New York trading, the euro hit a high of
$1.3748 against the dollar, its strongest level since Nov. 14,
2011. It was last at $1.3765, up 0.61 percent.
    Against the yen, the dollar fell as low as 97.86
 but later rebounded, up 0.19 percent at 98.37 yen.
    The dollar index, a basked of six major trading
currencies, was down 0.55 percent.
    U.S. Treasuries yields fell to the lowest in three months on
the jobs data. 
    "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 24/32 in
price to yield 2.5215 percent, the lowest since July 24. 
    In Europe, 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 rose 74 cents a barrel to
$110.38. U.S. crude futures slipped 12 cents to $99.10 a barrel.

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