May 2, 2014 / 8:37 PM / in 4 years

GLOBAL MARKETS-Wall Street slips despite U.S. jobs data; bond prices rise

(Updates to close of New York trading)
    * U.S. payrolls 288,000 vs forecast 210,000
    * U.S. unemployment 6.3 pct vs forecast 6.6 pct
    * Short-dated Treasuries lose ground, long end favored
    * New violence in Ukraine crisis keeps caution high

    By David Gaffen
    NEW YORK, May 2 (Reuters) - Wall Street shares slipped and
investors retreated to long-dated government debt on Friday, as
enthusiasm over strong U.S. jobs growth was undercut by flat
wages and a decline in the number of people looking for work.
    Global market indexes ended the week flat. The MSCI
All-World Index was barely changed Friday, but
ended the week up 1.1 percent.     
    The U.S. economy added 288,000 jobs in April, more than
expected. Even so, the report raised some concerns as more than
800,000 people left the U.S. labor force and average hourly
wages were unchanged in April. 
    "The market perceives the unemployment numbers as good on
quantity but bad on quality," said Guy Lebas, chief fixed-income
strategist at Janney Montgomery Scott in Philadelphia.
    Traders also said that news on more violence in eastern
Ukraine sparked a shift into the bond market that pushed the
yield on the 30-year note to lows not seen since last June.
    Pro-Russian rebels shot down two Ukrainian helicopters on
Friday, killing two crew members, while Moscow accused Kiev of
wrecking hopes of peace by launching a "criminal" assault to
retake the separatist-held town of Slaviansk. 
    "Geopolitical tension has come back into the market. You're
going into a weekend and obviously events can unfold so you've
got profit-taking," said Quincy Krosby, market strategist at
Prudential Financial, based in Newark, New Jersey. 
    Selling in U.S. Treasuries was modest in short- and
medium-dated notes as investors responded to an increased
likelihood of interest-rate hikes from the Federal Reserve.
Investors moved into longer-dated Treasuries, pushing down their
yields, on views that the economy is still not strong enough to
spark inflation.
    The three-year Treasury note was down 2/32 in price to yield
0.875 percent, while the 30-year bond, after an earlier selloff,
rose 30/32 in price, lowering its yield to 3.365 percent.
    The jobs figures bumped up the odds of the Federal Reserve
raising interest rates sooner in 2015, with expectations for a
rate increase by June 2015 increasing to about 56 percent from
47 percent a day earlier.
    U.S. stocks slipped after an early rally. The Dow Jones
industrial average fell 45.98 points, or 0.28 percent, to
16,512.89, the S&P 500 lost 2.54 points, or 0.13 percent,
to 1,881.14, and the Nasdaq Composite dropped 3.554
points, or 0.09 percent, to 4,123.897..
    In the currency market, the dollar edged lower against the
yen and was flat against the euro.
    Among commodities, oil rose after Thursday's declines. U.S.
crude futures gained 41 cents to $99.83 a barrel while
Brent crude rose 79 cents to $108.55.
    Gold rose by $14.65 to $1,298.14, while copper,
 whose industrial uses make it sensitive to growth
expectations, gained 1.1 percent.

 (Additional reporting by Marc Jones in London; Editing by
Meredith Mazzilli and Leslie Adler)
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