A robust U.S. jobs report raised concern in markets that the Federal
Reserve may raise interest rates sooner than previously thought,
knocking U.S. stock and bond prices lower on Friday.
News the U.S. unemployment rate hit a 6-1/2-year low in February fed into the dollar's winning streak, propelling it to a fresh 11-1/2-year peak against a group of currencies and a similar high against the euro.
The greenback's gains hurt oil and gold prices which are set against the U.S. currency globally.
"Any sign of undue strength will raise the specter of rates climbing sooner than expected, and we were already expecting rates to rise this year," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio.
Wall Street and U.S. Treasuries have scored strong gains in large part due to the Fed's ultra-loose monetary policy to combat the recession and the global credit crisis.
The U.S. Labor Department said on Friday employers added 295,000 workers in February, beating a forecast increase of 240,000. It was the longest run of 200,000-plus increases since 1994. The jobless rate dropped to 5.5 percent from 5.7 percent in January.
U.S. interest rates futures suggested traders placed more bets the Fed might raise rates this summer, but they have not fully priced in such a move until late 2015.
In mid-morning trading, the Dow Jones industrial average <.DJI> dropped 109.24 points, or 0.6 percent, to 18,026.48, the S&P 500 <.SPX> fell 9.81 points, or 0.47 percent, to 2,091.23 and the Nasdaq Composite <.IXIC> declined 6.26 points, or 0.13 percent, to 4,976.55.
After the release of the jobs data, S&P Dow Jones Indices said Apple <AAPL.O>, the largest U.S. firm by market value, will replace AT&T <T.N> in its Dow index on March 18.
Europe's benchmark FTSEurofirst 300 <.FTEU3> was up 0.4 percent at seven-year highs ahead of the European Central Bank's bond-purchase stimulus that begins on Monday
Tokyo's Nikkei stock index <.N225> rose 1.2 percent, ending higher for four consecutive weeks.
The MSCI world equity index <.MIWD00000PUS>, which tracks shares in 45 nations, fell 0.57 percent, to 427.31.
Worries about a Fed rate hike spurred selling in U.S. Treasuries, with benchmark 10-year note yields jumping to 2.24 percent, the highest since late December.
In contrast, Italian, Spanish and Portuguese yields posted record lows in anticipation of ECB bond purchases for its stimulus program.
The dollar index <.DXY> was last up 1.24 percent at 97.570.
The euro hit another 11-1/2-year low against the greenback and was last down 1.4 percent at $1.0872. The dollar was up 1 percent at 121.16 yen after touching its highest in about three months.
Brent crude oil <LCOc1> was last down 71 cents, or 0.43 percent, at $60.05 a barrel. U.S. crude <CLc1> was last down 71 cents, or 1.4 percent, at $50.05.
Spot gold fell $23.75 or 1.98 percent, to $1,174.45 an ounce.
(Additional reporting by Ryan Vlastelica in New York, Marc Jones and Sujata Rao in London and Wayne Cole in Sydney; Editing by James Dalgleish)
News the U.S. unemployment rate hit a 6-1/2-year low in February fed into the dollar's winning streak, propelling it to a fresh 11-1/2-year peak against a group of currencies and a similar high against the euro.
The greenback's gains hurt oil and gold prices which are set against the U.S. currency globally.
"Any sign of undue strength will raise the specter of rates climbing sooner than expected, and we were already expecting rates to rise this year," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio.
Wall Street and U.S. Treasuries have scored strong gains in large part due to the Fed's ultra-loose monetary policy to combat the recession and the global credit crisis.
The U.S. Labor Department said on Friday employers added 295,000 workers in February, beating a forecast increase of 240,000. It was the longest run of 200,000-plus increases since 1994. The jobless rate dropped to 5.5 percent from 5.7 percent in January.
U.S. interest rates futures suggested traders placed more bets the Fed might raise rates this summer, but they have not fully priced in such a move until late 2015.
In mid-morning trading, the Dow Jones industrial average <.DJI> dropped 109.24 points, or 0.6 percent, to 18,026.48, the S&P 500 <.SPX> fell 9.81 points, or 0.47 percent, to 2,091.23 and the Nasdaq Composite <.IXIC> declined 6.26 points, or 0.13 percent, to 4,976.55.
After the release of the jobs data, S&P Dow Jones Indices said Apple <AAPL.O>, the largest U.S. firm by market value, will replace AT&T <T.N> in its Dow index on March 18.
Europe's benchmark FTSEurofirst 300 <.FTEU3> was up 0.4 percent at seven-year highs ahead of the European Central Bank's bond-purchase stimulus that begins on Monday
Tokyo's Nikkei stock index <.N225> rose 1.2 percent, ending higher for four consecutive weeks.
The MSCI world equity index <.MIWD00000PUS>, which tracks shares in 45 nations, fell 0.57 percent, to 427.31.
Worries about a Fed rate hike spurred selling in U.S. Treasuries, with benchmark 10-year note yields jumping to 2.24 percent, the highest since late December.
In contrast, Italian, Spanish and Portuguese yields posted record lows in anticipation of ECB bond purchases for its stimulus program.
The dollar index <.DXY> was last up 1.24 percent at 97.570.
The euro hit another 11-1/2-year low against the greenback and was last down 1.4 percent at $1.0872. The dollar was up 1 percent at 121.16 yen after touching its highest in about three months.
Brent crude oil <LCOc1> was last down 71 cents, or 0.43 percent, at $60.05 a barrel. U.S. crude <CLc1> was last down 71 cents, or 1.4 percent, at $50.05.
Spot gold fell $23.75 or 1.98 percent, to $1,174.45 an ounce.
(Additional reporting by Ryan Vlastelica in New York, Marc Jones and Sujata Rao in London and Wayne Cole in Sydney; Editing by James Dalgleish)
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