Stocks shrug off data, gold hits high, oil sinks

NEW YORK (Reuters) - Global equity markets ended the week with gains on Friday, shrugging off initial shock at U.S. jobs data, but oil prices never fully recovered.

Gold climbed to another record high, piercing through the $1,100 an ounce mark after the data, before slipping back as investors decided the jobless numbers were not so bad.

While U.S. President Barack Obama called the data “sobering”, the increase in the unemployment rate to a higher-than-expected 10.2 percent, a 26-1/2-year peak, was later discounted after the number of jobs reported lost in August and September were revised down.

U.S. employers cut 190,000 jobs last month. Economists polled ahead of the data had expected 175,000 job cuts and an unemployment rate of 9.9 percent.

Daniel Katzive, currency strategist at Credit Suisse in New York, said the jobs number was not weak enough to call into question a global recovery story. At the same time, it was poor enough to keep the markets thinking the Fed will hold rates for some time.

For a chart showing the relationship between U.S. payrolls and economic output, please click on:here

The Japanese yen rose against the greenback and euro. The euro fell 1.1 percent to 133.56 yen, after hitting a session low of 133.22 yen. The U.S. dollar fell as low as 89.62 yen, according to Reuters data, and last traded 0.9 percent lower at 89.90 yen.

Recently the weak global economic environment has led investors to buy U.S. dollars for safety. However Friday’s data fueled the argument the Federal Reserve -- the U.S. central bank -- will maintain near-zero benchmark interest rates in order to facilitate cheap borrowing and investment.

The International Monetary Fund warned global financial leaders on Friday not to repeat the mistakes of the Great Depression and choke off emergency support for their economies too quickly. Group of 20 finance ministers and central bankers are meeting in Scotland.


Helping to overturn the impact of the jobs report were two analyst upgrades on shares of U.S. conglomerate General Electric GE.N, a bellwether for U.S. economic activity. This helped take some of the sting out of the stock market's initial fall after the data. GE's share price surged 7 percent to $15.44.

“GE got upgraded, which I thought was astonishing -- how bold,” said Cummins Catherwood, managing director at Boenning and Scattergood in West Conshohocken, Pennsylvania.

“But the trend is better -- most of the stuff we see is more positive than negative, or at least less negative than it might have been.”

At the close of trade, the Dow Jones industrial average .DJI was up 17.46 points, or 0.17 percent, at 10,023.42. The Standard & Poor's 500 Index .SPX rose 2.67 points, or 0.25 percent, at 1,069.30. The Nasdaq Composite Index .IXIC gained 7.12 points, or 0.34 percent, at 2,112.44.

For the week, both the Dow and the S&P 500 rose 3.2 percent, while the Nasdaq climbed 3.3 percent.

The MSCI world equity index .MIWD00000PUS rose 0.38 percent while the emerging markets index .MSCIEF gained 0.67 percent.

European share prices also turned higher, with bank stocks leading the way. Part-nationalized Royal Bank of Scotland RBS.L gained 5.3 percent after it said it more than halved third-quarter losses as impairments fell.

Europe's FTSEurofirst 300 index .FTEU3 rose 0.2 percent, up 1.6 percent for the week. Tokyo's benchmark Nikkei .N225 gained 0.74 percent to 9,789.35 on Friday after marking a one-month closing low on Thursday. The Nikkei fell 2.44 percent for the week.

Crude fell below $78 per barrel on prospects the U.S. jobs data means energy demands will decline. U.S. light sweet settled down $2.19, or 2.75 percent, to $77.43.

Spot gold touched a record $1,100.90 before retreating to $1,094.80, still up $4.25 or 0.39 percent on the day.

Benchmark 10-year U.S. Treasury prices rose 6/32 of a point in price to yield 3.503 percent.

In euro zone government bonds, the two-year Schatz paper outperformed with yields down 4 basis points at 1.28 percent, while 10-year Bund yields were up 1.9 basis points at 3.36 percent.

Additional reporting by Chuck Mikolajczak, Gene Ramos and Gertrude Chavez-Dreyfuss in New York; Lucia Mutikani in Washington; and Simon Falush, Joanne Frearson, George Matlock, and Jessica Mortimer in London; Editing by Andrew Hay