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 The dollar fell after data showed U.S. nonfarm payrolls grew by only
142,000 last month, far below the 225,000 forecast by analysts in a
Reuters poll. The July figure was revised upward to 209,000.
Major U.S. stock indexes pared early losses to close higher, with
the S&P 500 setting another record close, while Germany's DAX
<.GDAXI> and Spain's IBEX <.IBEX> also gained.
MCI's<.MIWD00000PUS> all-country index of performance in 45
countries also cut losses to edge higher.
Investors took the surprisingly weak jobs data as a sign the Federal
Reserve will not raise rates any time soon.
"What we saw today called off the dogs to some degree and took the
heat down a notch or two from investors' concern about rate hikes,"
said Jim Russell, senior equity strategist at U.S. Bank Wealth
Management in Cincinnati.
Mohamed El-Erian, chief economist at Allianz in Newport Beach,
California, said although the payrolls report was disappointing, it
was more solid in key components, such as improvement in the
unemployment rate to 6.1 percent.
"All this will reinforce the Federal Reserve's 'steady as she goes'
policy approach," El-Erian said.
The Dow Jones industrial average <.DJI> closed up 67.78 points, or
0.4 percent, to 17,137.36. The S&P 500 <.SPX> rose 10.06 points, or
0.5 percent, to 2,007.71 and the Nasdaq Composite <.IXIC> added
20.61 points, or 0.45 percent, to 4,582.90. It was the fifth week of
gains for the three indexes.
In Europe, the FTSEurofirst 300 index <.FTEU3> of top regional
shares pared losses to close down 0.35 percent at 1,396.02. MSCI's
all-country index was up 0.06 percent.
The dollar retreated from a nearly six-year high against the yen and
the euro recovered from a 14-month low against the greenback a day
after a surprise European Central Bank rate cut.
The euro edged up 0.08 percent against the dollar at $1.2954 after
shedding 1.6 percent on Thursday, its steepest fall in almost three
years, following the ECB cut rates to record lows to avert
deflation.
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On the EBS trading system, the dollar last traded down 0.19 percent
at 105.06 yen after it touched a nearly six-year high of 105.71 in
Asian trading.
Yields on Italian, Irish and Spanish bonds hit all-time lows in a
broad-based rally in euro zone debt spurred by the ECB's rate cuts
and openness to a large-scale bond-buying program.
The 10-year U.S. Treasury note pared gains to trade 2/32 lower in
price, pushing its yield up to 2.4569 percent.
Brent crude oil fell below $101 a barrel as a strong dollar
depressed demand and the jobs data suggested the U.S. economy was
growing more slowly than expected.
Oil prices on both sides of the Atlantic had fallen on Thursday as
the ECB rate cut led to a spike in the dollar, making it more
expensive for holders of other currencies to buy the
dollar-denominated commodity.
Brent <LCOc1> settled down $1.01 at $100.82 a barrel. U.S. crude
<CLc1> fell $1.16 to settle at $93.29 a barrel.
(Reporting by Herbert Lash; Additional reporting by Atul Prakash in
London; Editing by Dan Grebler and James Dalgleish)
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