Stocks, Dollar Rally as Gold, Treasuries Drop on Jobs Data - Bloomberg.com
Stocks, Dollar Rally as Gold, Treasuries Drop on Jobs DataBy Mary Childs
Dec. 4 (Bloomberg) -- Stocks rallied, while Treasuries and gold retreated, as an unexpected decrease in the U.S. unemployment rate bolstered optimism that the world’s largest economy is strengthening. The dollar gained the most since September against a measure of six major counterparts.
The Standard & Poor’s 500 Index jumped 1.1 percent to 1,112.32 at 9:33 a.m. in New York after the Labor Department said the U.S. lost the fewest jobs last month since the recession began. The MSCI World Index of 23 developed markets erased a 0.3 percent decline and advanced 0.5 percent. The 10- year Treasury note yield increased nine basis points to 3.47 and oil rallied 1.4 percent. Gold for immediate delivery slid 1.2 percent to $1,193.53 an ounce.
“We’re going to be popping bubblies,” said Burt White, chief investment officer at LPL Financial in Boston, which oversees $269 billion. “It’s great news and this has a huge impact on consumption and consumer spending and all the other aspects that can really continue to fuel growth here.”
The S&P 500 extended its weekly gain to 1.9 percent after the Labor Department said the nation lost 11,000 jobs in November, compared with the median economist estimate for a decrease of 125,000. The unemployment rate fell to 10 percent, signaling the recovery is lifting the labor market from the worst slump since World War II.
U.S. stocks fell yesterday as concern grew that job losses would top economists’ estimates. A private report on payrolls suggested the nation’s unemployment rate “might tick upward,” White House press secretary Robert Gibbs said yesterday.
‘Enjoy It for Today’
“Bottom line, the data is a clear positive but doesn’t square with other info,” said Peter Boockvar, equity strategist at Miller Tabak & Co. in New York, in a note to clients. “But let’s enjoy it for today.”
Gold for immediate delivery retreated from a record $1,226.56 reached yesterday. Copper for delivery in three months added 1.1 percent to $7,160 a metric ton on the London Metal Exchange.
The dollar rose 1.5 percent versus the yen for a fourth day of gains, the longest stretch since October. The Dollar Index, which measures the U.S. currency against six major trading partners, jumped as much as 1 percent to 75.404.
The Canadian dollar rose against all of its major counterparts as the nation’s employers added more positions than expected. The yen was headed for its first weekly decline versus the dollar since October as Japan’s government signaled the currency should decline further.
The dollar rallied as the jobs report spurred traders to increase bets that the Federal Reserve next year will boost its benchmark interest rate from a record low range near zero. Odds of an increase of at least 0.25 percentage points by the Fed’s June meeting grew to 52 percent from 43 percent yesterday, according to Fed funds futures trading.
To contact the reporter on this story: Mary Childs in New York at mchilds4@bloomberg.net.
Last Updated: December 4, 2009 09:39 EST
