Reuters: US Dollar Report: GLOBAL MARKETS-Shares, oil slide on U.S. payrolls

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GLOBAL MARKETS-Shares, oil slide on U.S. payrolls May 4th 2012, 15:48 Fri May 4, 2012 11:48am EDT * Weak U.S. payrolls, PMI reports in Europe, spell gloom * Global shares slide, bond prices jump on QE3 hopes * Brent falls to 3-month lows under $115 after jobs data * Dollar slips vs yen in volatile trade, euro firms By Herbert Lash NEW YORK, May 4 (Reuters) - Global stocks swooned and crude oil tumbled o n F riday after a weak U.S. jobs report and economic data that pointed to a deeper recession across the euro zone than previously thought. Major U.S. and European stock indices fell more than 1 percent, crude oil slumped more than 3 percent and government debt prices jumped after the Labor Department said U.S. employers cut back on hiring in April. Employers added just 115,000 workers to their payrolls last month and the unemployment rate fell one-tenth of a point to 8.1 percent, a three-year low, but only because the workforce shrank as people retired or stopped looking for a job. The third straight monthly decline in hiring growth spurred concerns that the U.S. economy is losing momentum and doused hopes that a stretch of strong winter hiring had signaled a turning point for the U.S. recovery. "The U.S. economy is not growing fast enough to improve the job market. When all is said and done that is the most important statistic," said Joseph Trevisani, chief market strategist at Worldwide Markets, Woodcliff Lake, New Jersey. The Dow Jones industrial average was down 134.38 points, or 1.02 percent, at 13,072.21. The Standard & Poor's 500 Index was down 17.89 points, or 1.29 percent, at 1,373.68. The Nasdaq Composite Index was down 48.52 points, or 1.60 percent, at 2,975.78. The U.S. jobs data added to the gloomy tone from Europe, where purchasing managers' indexes, primarily covering services, suggested a recession across the euro zone could extend to mid-year and be deeper than previously thought. The FTSEurofirst fell 1.7 percent to 1,026.34, despite strong corporate earnings from Royal Bank of Scotland , BNP Paribas and Lafarge. MSCI's all-country world equity index fell 1.3 percent to 322.10. Some analysts said the jobs report, which followed weaker-than-expected services sector data earlier this week, will fuel expectations of a third round of stimulus, or quantitative easing, by the Federal Reserve. "The headline disappointment increases the likelihood that (Fed Chairman Ben) Bernanke will move forward with QE3 later this summer in an attempt to further bolster employment growth," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York. The dollar slipped against the yen in volatile trading after the payrolls number. The dollar fell 0.4 percent against the yen to 79.89, but the U.S. dollar index gained 0.21 percent to 79.387. The euro was down 0.28 percent at $1.3113. The benchmark 10-year U.S. Treasury note rose 13/32 in price to yield 1.89 percent, and the 30-year U.S. Treasury bond gained 15/32 in price to yield 3.09 percent. Oil fell to three-month lows around $112 a barrel, on course for its steepest weekly fall since December, after the weak U.S. jobs report. Brent crude oil futures lost $4.24 to $111.84 a barrel, lows last seen in early February. U.S. crude fell $4.42 to $98.11 a barrel. "We are locked in this sluggish growth environment," said Robert Vanden Assem, head of investment grade fixed income at PineBridge Investments in New York, which manages about $67 billion in assets. Link this Share this Digg this Email Reprints

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