* European shares fall sharply, German index down 2 percent
* Strong U.S. jobs growth at first lifts equity markets
* Dollar rises from four-month low, bond prices fall
* Oil prices rise on heightened Ukraine concerns
By Herbert Lash
NEW YORK, March 7 A surprisingly strong U.S.
jobs report on Friday sent bond and gold prices sharply lower
and initially lifted equity markets, but mounting tensions over
Ukraine led stocks in Europe and elsewhere to retreat, while
U.S. shares ended little changed.
Diplomatic efforts to cool the crisis in Ukraine calmed
markets earlier in the week, but as tensions rose over Russia's
intervention in Crimea, investors tried to shield themselves
before the weekend from any potential confrontation.
European blue chips exposed to Russia and Ukraine came under
renewed pressure as Germany's DAX index, considered
the most vulnerable to any fallout, fell 2.0 percent, the
biggest drop among major regional indices.
The Euro STOXX Volatility Index, a sign of investor
apprehension, jumped 14.9 percent. But its U.S. counterpart, the
CBOE Volatility Index, rose less than 1 percent.
President Vladimir Putin rebuffed a warning from U.S.
President Barack Obama over Moscow's military intervention in
Crimea, saying on Friday that Russia could not ignore calls for
help from Russian speakers in Ukraine.
Putin said in a statement after an hour-long telephone call
that Moscow and Washington remain far apart, giving investors a
reason to take money off the table before the weekend.
"People are a little bit nervous to go into the weekend with
fully loaded long positions, given the ongoing Ukraine crisis,"
said Zeg Choudhry, head of trading at Northland Capital Partners
in Ilford, Britain.
The FTSEurofirst 300 index of top European shares
extended losses into the close, finishing down 1.3 percent at
MSCI's all-country world equity index
retreated to trade 0.3 percent lower after trading just off
peaks last seen at the end of 2007.
Wall Street was mostly flat, with the better-than-expected
U.S. nonfarm payrolls report pushing the benchmark S&P 500 index
to a fresh intra-day record high before it retreated.
The Dow Jones industrial average closed up 30.83
points, or 0.19 percent, at 16,452.72. The S&P 500 gained
1.01 points, or 0.05 percent, to 1,878.04 while the Nasdaq
Composite dropped 15.903 points, or 0.37 percent, to
For the week, the Dow rose 0.8 percent, the S&P 1.0 percent
and the Nasdaq 0.7 percent.
U.S. Treasuries yields rose to their highest in six weeks
after the February jobs report eased fears of an abrupt slowdown
in economic growth and kept the Federal Reserve on track in
reducing its monetary stimulus.
U.S. employers added 175,000 jobs to payrolls after creating
129,000 positions in January, the U.S. Labor Department said.
However, even as job growth accelerated sharply, the
unemployment rate rose to 6.7 percent from a five-year low of
Benchmark 10-year Treasury notes dropped 18/32 in price, the
yield rising to 2.82 percent, the highest since Jan.
23. It was last down almost 15/32 in price to yield 2.7915
German Bund futures rose 6 ticks to settle at
142.24, clawing back some ground after suffering their biggest
one-day fall since late December on Thursday after the European
Central Bank refrained from new stimulus measures.
The dollar rose from a four-month low. The dollar index
, a composite of six currency pairs, traded 0.07 percent
higher at 79.717. It earlier hit a bottom of 79.433 last seen on
The dollar was up 0.24 percent against the yen at
103.31 yen, while the euro rose 0.1 percent to $1.3872.
U.S. COMEX gold futures for April delivery fell
$13.60 to settle at $1,338.20 an ounce,
Crude oil rose on the U.S. jobs report and Ukraine,
offsetting a seasonal slowdown in demand, and analysts expected
more traders to take net long positions.
"It is definitely a good idea to have some length ahead of a
weekend's worth of rhetoric about Ukraine," said John Kilduff,
partner at Again Capital LLC in New York. "Any deterioration in
the prospect for a reasonable outcome gets rapidly priced into
Global benchmark Brent crude oil settled up 90 cents
at $109.00 a barrel. U.S. crude rose $1.02 to settle at