* U.S. jobs data disappoint; dollar slides
* European shares gain on ECB plan
* Spanish 10-year bond yields at lowest since May
By Luciana Lopez
NEW YORK, Sept 7 Weak U.S. jobs data took the
dollar lower and gold to a six-month high on Friday while plans
by the European Central Bank to tackle the region's debt crisis
continued to fuel buying in Spanish and Italian government debt.
U.S. stocks seesawed early in the session as investors
weighed the chances that the Federal Reserve could launch
another round of quantitative easing, pumping money into the
world's biggest economy in an effort to boost growth.
Data showing U.S. nonfarm payrolls increased by 96,000 last
month, well below forecasts for 125,000 new jobs, boosted
speculation that the bank could act as soon as its meeting next
The greenback fell 1.07 percent to 80.175 against a basket
of major currencies. The euro touched around a
four-month high against the dollar of $1.2806 before more
recently trading at $1.2800. The common currency rose to its
highest against the Swiss franc in eight months.
"This weak employment report, in jobs, wages, hours worked
and participation is probably the last piece the Fed needs
before launching another round of quantitative easing next
week," said Joseph Trevisani, chief market strategist at
Worldwide Markets in Woodcliff Lake, New Jersey.
"QE will boost equities, damage the dollar and do little for
the economy, but what else can an activist Fed do?"
Gold also jumped, with spot gold hitting $1,738.60
per ounce, its strongest since late February. U.S. gold futures
also jumped to $1,742.10.
U.S. equities were mixed after closing at multi-year highs
in the previous session.
The Dow Jones industrial average gained 5.11 points,
or 0.04 percent, to 13,297.11. The Standard & Poor's 500 Index
gained 4.21 points, or 0.29 percent, to 1,436.33. The
Nasdaq Composite Index gained 1.35 points, or 0.04
percent, to 3,137.16.
The benchmark 10-year U.S. Treasury note was up
20/32 in price, with the yield at 1.6079 percent.
"The weaker-than-expected job growth number caused U.S.
Treasuries to rally across the curve," said Eric Stein, vice
president and portfolio manager at Eaton Vance Investment
Managers in Boston. "(It) all but guarantees the Fed will extend
the low (interest) rate guidance at next week's policy meeting
(and) makes QE3 a lot more likely."
European stocks advanced after the ECB on Thursday unveiled
a new plan for potentially unlimited bond buying, which it hopes
will lower the borrowing costs for heavily indebted nations like
Spain and Italy and ease fears over the future of the euro.
Ten-year Spanish bond yields slid to 5.731
percent, their lowest since early April.
The FTSEurofirst 300 equity index rose to 1106.49,
up 0.16 percent on the day.
The MSCI world equity index climbed 1.12
percent to 329.98. The index is back to its level of early May,
when demand was still being supported by a massive injection of
cheap three-year funds into the banking system by the ECB.
Brent and U.S. crude futures fell in volatile trade. Brent
crude was down 0.25 percent at $113.21 a barrel. U.S.
crude was down 0.31 percent at $95.20 a barrel.