* 203,000 new jobs added in Nov; jobless rate at 7.0 pct
* Dollar rallies against yen
* Bonds retrace earlier losses; investors mull Fed policy
By Herbert Lash
NEW YORK, Dec 6 Global equity markets surged and
the dollar rose against the yen on Friday after
stronger-than-expected U.S. jobs data drove confidence in the
strength of the economic recovery, even as it boosted the case
for scaling back Federal Reserve stimulus later this month.
The debate over when the Fed starts to reduce the flow of
cheap money has dominated markets worldwide for months. The main
U.S. employment indicator -- nonfarm payrolls -- bolstered the
view that the labor market in the world's biggest economy is on
A total of 203,000 jobs were added last month, the Labor
Department said, beating expectations of 180,000, while the
unemployment rate dropped three-tenths of a percentage point to
a five-year low of 7 percent.
The dollar jumped to session highs against the yen and
stocks on Wall Street surged, with the Nasdaq setting a record
intraday high for the year and the Dow rising 1 percent.
"I don't think the Fed is in a big rush to do anything
drastic in the absence of inflation. A few strong jobs numbers
do not mean we are out of the woods," said Michael Marrale, head
of research, sales and trading at ITG in New York.
"That said, we are in a very good spot and we can offset
growth with tapering and we come out of this in one piece."
Tom Porcelli, chief U.S. economist at RBC Capital Markets in
New York, said that rising incomes stand out as even more
important than the job gains.
"Wages are strongly driving consumption in this cycle more
than any other time. Overall wage gains were the most compelling
news in this data," Porcelli said.
The dollar index, which tracks the greenback versus a
basket of six currencies, rose 0.15 percent to 80.353.
Against the yen, the dollar was last up 1.09 percent
at 102.89 yen. The dollar's gains versus the euro were
short-lived, as the euro zone common currency was boosted by
rising short-term interest rates a day after the European
Central Bank dampened hopes for an imminent easing move.
The euro was up 0.14 percent against the dollar to
Other data also was bullish for stocks. Consumer spending
increased 0.3 percent in October, or one-tenth of a percentage
point more than expected, after rising 0.2 percent in September.
The Thomson Reuters/University of Michigan's preliminary
reading on the overall index on consumer sentiment jumped to
82.5 for December, up from a final reading of 75.1 in November.
This was the highest reading for the index since July and topped
analyst forecasts for a reading of 76.
MSCI's all-country world equity index, which
tracks shares in 45 nations, rose 0.73 percent, while the
pan-European FTSEurofirst 300 index was up 0.73 percent
to close at a provisional 1,270.53.
The Dow Jones industrial average rose 158.87 points,
or 1 percent, to 15,980.38. The S&P 500 gained 17.28
points, or 0.97 percent, to 1,802.31 and the Nasdaq Composite
added 31.575 points, or 0.78 percent, to 4,064.74.
U.S. Treasury yields, a benchmark for borrowing
costs around the world, briefly climbed above 2.9 percent, and
later the 10-year note was trading flat in price to yield 2.8608
Bund futures settled up 22 ticks at 140.11 euros.
Gold futures were last up 0.06 percent, at $1,232.6
Brent crude was last up 0.21 percent, at $111.21 a
barrel. U.S. crude was last up 5 cents at $97.43.