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 Wall Street initially rose and European equities hit a seven-year
high on the Labor Department report that showed solid U.S. job
growth, with wages rebounding strongly. More than one million jobs
have been created over the past three months, the first time that
has happened since late 1997.
But U.S. stocks sold off in the afternoon on renewed jitters over
Greece as a deadline looms next week for the newly elected
government to secure a bailout extension.
"There's more loggerheads coming out of the Greece negotiations,"
said Bucky Hellwig, senior vice president at BB&T Wealth Management
in Birmingham, Alabama. "The negotiations on the Greek debt weighed
in on the market this afternoon."
Oil futures bounced up from near-six-year lows, but gold <XAU=> fell
more than 2 percent and spot silver <XAG=> slid 3.7 percent. U.S.
Treasury yields rose and the yield curve flattened as traders
increased bets the Fed will raise rates by mid-year.
The better-than-expected labor report added to expectations the Fed
will begin to raise near-zero interest rates around the start of
summer and slammed rate-sensitive securities.
Real estate stocks and the utilities sector <.SPLRCU> led the
decline as their higher yields lose appeal in a rising rate
environment, while financials <.SPSY> gained as they stand to see an
increase in profits from higher rates.
Utilities fell 4.13 percent, the biggest single-day drop since
August 2011, and financials rose 0.73 percent. One of the biggest
percentage losers in the S&P 500 was Simon Properties Group <SPG.N>,
which lost 4.0 percent.
"With the stronger-than-anticipated employment report, there's
discussion the Fed might move earlier rather than later," Hellwig
said. "We've seen a change in some of the leadership today. We've
seen the financial sector do well and the interest-rate sensitive
utilities sector do poorly."
The Dow Jones industrial average <.DJI> fell 60.59 points, or 0.34
percent, to 17,824.29. The S&P 500 <.SPX> lost 7.05 points, or 0.34
percent, to 2,055.47 and the Nasdaq Composite <.IXIC> shed 20.70
points, or 0.43 percent, to close at 4,744.40.
In Europe, the FTSEurofirst 300 index <.FTEU3> of top regional
shares rose 0.2 percent to close at 1,490.84. But markets in
Britain, Germany, France and Italy all fell on mixed earnings
reports and worries about Greek debt negotiations, which put an
early damper on global equity gauges.
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MSCI's all-country world stock index <.MIWD00000PUS> fell 0.48
percent.
Brent crude was on track for its biggest weekly rise since 2011,
boosted by fighting in Libya and the strong economic signals from
the United States.
Benchmark Brent crude <LCOc1> rose $1.23 to settle at $57.80 a
barrel. U.S. crude for March delivery <CLc1> settled up $1.21 at
$51.69 a barrel. [O/R]
On the U.S. Treasury market, benchmark 10-year note yields
<US10YT=RR> fell 1-9/32 in price to yield 1.9584 percent, while
30-year bond yields <US30YT=RR> rose to 2.5287 percent. [US/]
Yields on German bunds and British gilts also rose on the U.S. jobs
data.
"By any measure, this was an extremely good report," Tom Porcelli,
chief U.S. economist at RBC Capital Markets in New York, said of the
January jobs report.
The dollar index was up 1.16 percent <.DXY> at 94.652, while against
the yen <JPY=>, the dollar rose 1.26 percent to 118.99.
The euro was down 1.35 percent at $1.1320 <EUR=>. [USD/]
(Additional reporting by Chuck Mikolajczak in New Yori, reporting by
Herbert Lash; Editing by David Gregorio, Dan Grebler and Bernard
Orr)
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