Stocks jump, dollar and yields fall after US jobs market softens

NEW YORK, Nov 3 (Reuters) – Global stock indexes rose sharply, the U.S. dollar dropped to a six-week low and benchmark 10-year U.S. Treasury yields fell to five-week lows on Friday after data showed U.S. job growth slowed more than expected in October.

The job growth slowdown underscored views that the Federal Reserve may be done hiking interest rates.

U.S. two-year yields also were the lowest since early September after the data, which showed U.S. job growth slowed in part as strikes by the United Auto Workers union against Detroit’s “Big Three” carmakers depressed manufacturing payrolls.

The data also showed the increase in annual wages was the smallest in nearly 2-1/2 years, pointing to an easing in labor market conditions.

“The good news here is that the slowdown will likely keep the Fed on the sidelines going forward,” said Brad McMillan, chief investment officer for Commonwealth Financial Network in Waltham, Massachusetts.

“One of their key concerns has been an overheated economy, especially after last quarter’s GDP growth, and this suggests that problem is going away.”

Wednesday’s U.S. central bank decision to leave rates unchanged and comments by Fed Chair Jerome Powell indicated to some investors that the Fed may be done raising rates. The Bank of England on Thursday also left rates unchanged.

Central bank officials however stressed that more may need to be done to tackle inflation.

Benchmark 10-year yields fell as low as 4.527%, the lowest since Sept. 29. Two-year note yields reached 4.847%, the lowest since Sept. 1.

A decision on Wednesday by the U.S. Treasury to issue less long-term debt than expected also fuelled the rally in bonds, as did data on Thursday suggesting the U.S. economy might finally be cooling.

The Dow Jones Industrial Average (.DJI) rose 307.85 points, or 0.91%, to 34,146.93, the S&P 500 (.SPX) gained 55.68 points, or 1.29%, to 4,373.46 and the Nasdaq Composite (.IXIC) added 225.03 points, or 1.69%, to 13,519.22.

Bucking the trend of the broader market, Apple (AAPL.O) shares were down 0.9%, a day after the company reported quarterly results and warned of a dull holiday quarter.

The pan-European STOXX 600 index (.STOXX) rose 0.17% and MSCI’s gauge of stocks across the globe (.MIWD00000PUS) gained 1.44%.

The U.S. dollar index dropped to a six-week low after the jobs data. In afternoon trading, the dollar index fell 1.111%, with the euro up 1.07% to $1.0734.

The Japanese yen strengthened 0.72% versus the greenback at 149.31 per dollar, while sterling was last trading at $1.2379, up 1.46% on the day.

In commodities, oil prices ended lower, with the geopolitical risk premium waning.

Brent crude futures settled at $84.89 a barrel, while U.S. crude futures dropped $1.95 to settle at $80.51.

Spot gold added 0.4% to $1,994.31 an ounce.

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