NEW YORK (Reuters) – Wall Street and a gauge of global equity markets on Friday recovered from earlier losses as investors took stock of a report that showed faster-than-expected U.S. jobs growth but which had previously stoked inflation concerns.
Trading was frantic across the globe, as Asian markets dropped overnight while MSCI’s all-country index was on its longest losing streak in six months before clawing back.
All three main indexes bounced back from early losses. Investors have been spooked this week as rising interest rates offset optimism about an economic rebound.
Microsoft rallied 2.2%, boosting the S&P 500 more than any other stock.
“The market is consolidating itself around what is likely to be some pretty healthy robust economic growth and inflation-related readings out of the economy for the balance of 2021,” said Jeff MacDonald, Head of Fixed-Income Strategies, Fiduciary Trust International in New York. MacDonald said.
The Dow Jones Industrial Average rose 446.98 points, or 1.45%, to 31,371.12, the S&P 500 gained 59.5 points, or 1.58%, to 3,827.97 and the Nasdaq Composite added 147.19 points, or 1.16%, to 12,870.66.
The pan-European STOXX 600 index lost 0.78% and MSCI’s gauge of stocks across the globe gained 0.41%.
Emerging market stocks lost 0.65%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.88% lower, while Japan’s Nikkei lost 0.23%.
The U.S. economy created more jobs than expected in February new COVID-19 cases fell and additional pandemic relief money from the government boosted hiring at restaurants, putting the labor market recovery on firmer footing.
Still, it will probably take several years for the economy to heal from the deep scars inflicted by the pandemic, now in its second year.
The market remained volatile as it was on Thursday when Federal Reserve Chairman Jerome Powell showed little alarm about a rise in bond yields.
The yield on 10-year Treasury notes was up 0.2 basis points to 1.552%. The yield climbed as high as 1.625%, its highest since Feb 13, 2020.
Rising Treasury yields also bolstered demand for the dollar. The dollar index jumped to a three-month high of 91.935.
The dollar index last rose 0.358%, with the euro down 0.44% to $1.1913The Japanese yen weakened 0.33% versus the greenback, last at 108.32 per dollar, its lowest since June.
The British pound lost ground against a resurgent dollar on Friday, as currency traders took some risk off the table amid rising U.S. bond yields.
Sterling fell to a three-week low against the dollar, briefly dropping below $1.38. It was last down 0.45% at $1.3832.
The dollar’s strength also hit gold prices, which sank to a nine-month low as investors sold the precious metal to reduce the opportunity cost of holding the non-yielding asset. [GOL/]
Spot gold added 0.1% to $1,698.61 an ounce. U.S. gold futures gained 0.02% to $1,698.00 an ounce. Earlier, spot gold was at $1,697 per ounce, trading below $1,700 for the first time since June 2020.
Graphic: U.S. yields, inflation expectations and world stocks:
Oil prices jumped after the Organization of the Petroleum Exporting Countries and its allies agreed to mostly maintain their supply cuts in April as they await a more solid recovery in demand from the COVID-19 pandemic. [O/R]
U.S. crude recently rose 3.48% to $66.05 per barrel and Brent was at $69.31, up 3.85% on the day.
India, the world’s third-biggest oil importer and consumer, on Friday said the decision by major producers to extend output cuts as prices move higher could threaten the consumption led-recovery in some countries.
“The decision by OPEC+ has saddened us. It is not good news for India, China, Japan, Korea and other consuming nations,” India’s Minister for Petroleum and Natural Gas Dharmendra Pradhan told Reuters.
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