* Investors shrug off disappointing jobs report, citing
* Unemployment rate falls to five-year low of 6.6 percent
* Bond prices rise on the jobs report, economic softness
By Herbert Lash
NEW YORK, Feb 7 Global equity markets rallied on
Friday as investors pegged a poor U.S. jobs report on bad
weather, but bond yields and the dollar fell as the data showed
employers hired far fewer workers than expected in January,
suggesting economic softness.
Non-farm payrolls rose by 113,000, well below the consensus
of 185,000, although the unemployment rate hit a five-year low
of 6.6 percent, the U.S. Labor Department said.
The dollar fell broadly while safe-haven gold and U.S.
government debt prices rose on the unemployment report. Equities
also rose, with investors writing off the weakest two months of
U.S. job growth in three years on inclement weather.
The household survey from which the jobless rate is derived
found strong gains in employment and an increase in the number
of people in the labor force, off-setting concerns about a soft
patch in the economy.
The proportion of working-age Americans with a job rose to
58.8 percent, the highest since October 2012.
"Markets are increasingly behaving as though the recent
series of soft economic data is truly attributable to bad
weather, and not some broader downturn in demand," said David
Joy, chief market strategist at Ameriprise Financial in Boston.
"It's unlikely that the economic momentum from late last
year simply stalled in December and January," Joy said.
U.S. gross domestic product grew by the most in a decade in
the last half of 2013, the Commerce Department said last week.
MSCI's all-country stock index rose 0.80
percent, and its gauge of emerging markets rose 0.71
The pan-European FTSEurofirst 300 index of leading
shares closed up 0.71 percent to a provisional 1,299.53, helped
by steelmaker Arcelor as investors bet equities would
continue to benefit from the region's gradual economic rebound.
Arcelor rose 0.81 percent to 12.495.
On Wall Street, the Dow Jones industrial average rose
98.42 points or 0.63 percent, to 15,726.95. The S&P 500
gained 14.88 points, or 0.84 percent, to 1,788.31 and the Nasdaq
Composite added 48.57 points, or 1.2 percent, to
"Expectations for the report were too high, and investors
are giving the report the benefit of the doubt because of the
weather," said Donald Selkin, chief market strategist at
National Securities in New York.
After the sell-off earlier in the week, the fact equities
are rising after Thursday's gains shows there is still momentum
to the bull market, Selkin said.
"Stocks initially got killed after the report came out, but
now we're pretty sharply higher. That's a strong sign that we've
bottomed out," he said.
Though the labor market report called into question the
strength of the economy, the preponderance of most economic data
still shows some pretty good growth, said Anthony Valeri,
investment strategist at LPL Financial in San Diego.
"We're seeing earnings on track to grow about 9 percent
year-over-year, and as long as that's the case, the pullback in
stocks is likely to be limited," Valeri said.
"The data hasn't been weak enough to suggest that the
current earnings trajectory will deviate," he said.
Earnings have been holding up.
Of the 343 companies in the S&P 500 that have reported
earnings to date for last year's fourth quarter, 67.9 percent
beat analyst expectations, Thomson Reuters data show. In a
typical quarter since 1994, 63 percent beat estimates.
The dollar index fell 0.18 percent to 80.763, as the
euro gained 0.18 percent to 1.3612 against the greenback.
The dollar rose 0.22 percent to 102.30 against the yen.
The benchmark 10-year U.S. Treasury note rose 8/32 in price,
pushing its yield down to 2.6711 percent.
German Bund futures settled up 50 ticks at 143.83,
retreating from earlier highs of 144.02, while cash 10-year
yields on government debt fell to 1.66 percent.
Brent crude rose toward $108 a barrel after the fall in the
U.S jobless rate fueled hopes for stronger demand in the world's
top oil consumer.
Brent crude oil futures were up $1.13 at $108.32 a
barrel. U.S. crude was up 61 cents at $98.45 a barrel.