GLOBAL MARKETS-Stocks fall as Nasdaq slides; dollar eases on jobs data
* Wall St touches record high, then retreats on Nasdaq slide
* Dollar slips as solid US jobs data suggests less stimulus
* Brent rises from five-month low to above $106
* Bond yields dip after data eases fears of early rate hike
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK (Frankfurt: HX6.F - news) , April 4 (Reuters) - A slide in biotech stocks
pulled Wall Street and a measure of global equities lower on
Friday despite a solid U.S. jobs report that weakened the dollar
on views that the Federal Reserve will keep scaling back its
stimulus.
The U.S. bond market, surprisingly, rallied, particularly
five-year Treasury notes, which had been weak lately on fears
the Fed could raise interest rates earlier than anticipated.
The FTSEurofirst 300 index of European shares
touched a peak last seen in 2008 on the U.S. jobs data and
closed higher, for a ninth straight gain and marking the third
consecutive week of higher closes.
But stocks on Wall Street retreated after stabilizing
earlier in the week as momentum stocks such as biotechs fell for
a second straight session. The Nasdaq biotech index lost
4.01 percent, and the Nasdaq composite fell 2.6 percent in its
worse single-day loss in two months.
The decline pulled down U.S. stocks and global equities.
"You've got some big names in there. There is a high
correlation inside of those groups," said Keith Bliss, senior
vice president at Cuttone & Co in New York. "Managers tend to
trade the entire group as opposed to individual names. So that
of course, is hitting the Nasdaq and everybody else."
Equities had opened higher on optimism spurred by the U.S.
nonfarm payrolls report, which a gain of 192,000 jobs in March,
just shy of the 200,000 forecast, after rising 197,000 in
February. The unemployment rate was unchanged at 6.7 percent.
With a solid pace of hiring for a second month, the U.S.
economy appears to be recovering from a winter slowdown.
A smaller survey of households, from which the unemployment
rate is derived, showed a much bigger surge in employment. That
jump was met by a rise in the number of people entering the
labor force, a show of confidence in the U.S. job market.
The percentage of working-age Americans with a job reached
its highest level since the summer of 2009.
"I'm surprised by the overall weakness today, but since it
is concentrated in names that have been weak, I think it is just
a continuation of that. I'm not concerned about this spilling
over to the broader market," said David Joy, chief market
strategist at Ameriprise Financial in Boston, where he helps
oversee $703 billion in assets under management.
"We've been in a trading range, finding resistance at record
levels, so this isn't cause for alarm. The data is getting
stronger, which suggests we have an opportunity to move higher
with participation from other groups," Joy said.
The S&P 500 hit a record high before retreating. MSCI (NYSE: MSCI - news) 's
all-country world stock index fell 0.45 percent.
The Dow Jones industrial average fell 159.84 points,
or 0.96 percent, to 16,412.71. The S&P 500 lost 23.68
points, or 1.25 percent, to 1,865.09, and the Nasdaq Composite
dropped 110.014 points, or 2.6 percent, to 4,127.726.
For the week, the Dow rose 0.6 percent, the S&P gained 0.4
percent, and the Nasdaq fell 0.7 percent.
Bond prices rose, with the five-year up 13/32 in
price to yield 1.7022 percent. The benchmark 10-year U.S.
Treasury note rose 17/32 in price to yield 2.7261
percent.
"This (jobs) number doesn't give any reason to move up the
Fed timing of rate hikes, which is what was feared most," said
John Briggs, U.S. rates strategist at RBS (LSE: RBS.L - news) in Stamford,
Connecticut.
The FTSEurofirst 300 index closed up 0.56 percent
at 1,352.78.
The dollar was choppy against the euro and declined against
other major currencies despite the U.S. jobs gains.
"It's a Goldilocks report, not too warm and not too cold,
and puts pressure on the next report in May to be good," Anthony
Valeri, investment strategist at LPL Financial (NasdaqGS: LPLA - news) in San Diego,
said. "It doesn't change the pace of tapering and shows the
economy is still on track."
The greenback was up 0.14 percent against the euro at
$1.3695. It fell 0.66 percent to 103.22 against the Japanese yen
after hitting a session high of 104.12 yen in trading
immediately after the employment report.
Brent crude rose above $106 a barrel as expectations of a
deal to reopen vital Libyan oil ports were offset by doubts that
a lasting resolution was imminent.
Brent crude settled up 57 cents at $106.15 a barrel.
U.S. crude, or West Texas Intermediate, rose 85 cents to
settle at $101.14 a barrel.
(Reporting by Herbert Lash; additional reporting by Marc Jones
in London; Editing by Bernadette Baum, Meredith Mazzilli, Dan
Grebler and Leslie Adler)
