Stocks, U.S. Futures Fall on Jobs Data; Gold, Treasuries Rise
Dec. 3 (Bloomberg) -- Stocks and U.S. index futures fell and the dollar weakened for a third day after a report showed America added fewer jobs than forecast and the unemployment rate unexpectedly increased. Gold and U.S. Treasuries rose, while Irish and Portuguese bonds gained.
Futures on the Standard & Poor's 500 Index lost 0.4 percent at 8:35 a.m. in New York. The Stoxx Europe 600 Index sank 0.3 percent. The Dollar Index fell 0.5 percent. The yield on the U.S. 10-year Treasury note fell seven basis points to 2.92 percent. The yield on the Irish 10-year bond slid 40 basis points, while the Portuguese yield dropped 29 basis points. The ruble rose the most in two weeks versus the dollar after Russia won the right to host soccer's 2018 World Cup.
U.S. payrolls increased by 39,000, less than the most pessimistic projection of economists surveyed by Bloomberg News, after a revised 172,000 increase the prior month, the Labor Department said. The European Central Bank probably bought Portuguese and Irish debt yesterday as ECB President Jean-Claude Trichet pledged to maintain emergency liquidity measures.
"The jobs report is a bit of a shocker after all the good data we've seen," said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which manages $342 billion. "It's a bad number and now investors will be even more skittish, waiting to get a sense on whether it sets a whole new direction or not. We'll have to wait and see. In the meantime, investors will be just disappointed."
The decline in U.S. futures indicated the S&P 500 will pare yesterday's rally to its highest level in almost a month. The dollar weakened 0.9 percent to 83.03 yen.
Jobs Report
The jobless rate rose to 9.8 percent, the highest since April, while hours worked and earnings stagnated, according to the Labor Department. A separate report may show service industries, which account for almost 90 percent of the economy, grew last month at the fastest pace since May.
European equities erased earlier gains, with two stocks declining for every one that rose. GN Store Nord A/S fell 4.2 percent after Telekomunikacja Polska SA filed a complaint over an arbitration procedure.
The ruble appreciated 0.5 percent against the dollar. Russia's Micex Index advanced 0.6 percent to the highest level since July 2008 as OAO Novolipetsk Steel and OAO Severstal surged more than 3 percent. The MSCI Emerging Markets Index pared earlier gains after the U.S. jobs report, climbing 0.3 percent.
The extra yield, or spread, that investors demand to hold 10-year Irish securities instead of benchmark German bunds fell 33 basis points to 536 basis points, while the Portuguese-German spread narrowed 30 basis points to 304 basis points. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments fell two basis points to 178, compared with a record-high 200.75 basis points on Nov. 30, according to CMA.
Brent crude for January delivery on the ICE Futures Europe exchange rose to $91.07 a barrel, its highest since Oct. 3, 2008. Oil will advance to $120 a barrel in 2012 as consumption in emerging economies increases, JPMorgan Chase & Co. said in a report today.
Gold for immediate delivery rose 0.4 percent to $1,390.80 an ounce. Wheat for March delivery climbed as much as 3.4 percent to the highest level since Aug. 6 on concern wet weather in Australia may curb supply. The S&P GSCI Index of 24 commodities added 0.5 percent.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editor responsible for this story: Paul Sillitoe in London at psillitoe@bloomberg.net
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