US jobs data boosts stocks, dollar, yields

Better-than-expected data on the state of U.S. jobs on Friday reversed European stock losses, set Wall Street on course for a positive start and stripped demand for government bonds.

The dollar rose against the yen and euro and Treasury yields shot up.

The U.S. Labor Department said that U.S. employers cut 247,000 jobs in July and that the unemployment rate eased to 9.4 percent in July, the first time the jobless rate has fallen since April 2008. Economists polled by Reuters had expected that 320,000 jobs were lost in July.

"This is the best showing (since) prior to the financial meltdown and those are important benchmarks to achieve," said Richard Dekaser, president of Woodley Park Research.

Global stocks remained weak but recovered from deeper losses, with MSCI's all-country world index down around 0.1 percent.

The pan-European FTSEurofirst 300 index of top shares was up 0.7 percent, having previously been in negative territory.

Although jobs continued to fall in July, the numbers were seen as a positive improvement. Jobs data often gives a steer on future consumer sentiment and spending.

"From a psychological standpoint, the unemployment rate falling will have some impact on consumer psyches. A tick down is a positive thing," said Tom Porcelli, market economist at RBC Capital Markets.

DOLLAR HIGHER

The dollar rose against both the euro and yen after the report and reversed losses against a basket of currencies to stand 0.4 percent higher.

The euro was last 0.2 percent lower at $1.4312. The dollar rose more than 1 percent against the yen, which tends to suffer from signs of an improving world economy.

Bond yields climbed. The benchmark 10-year Treasury yield rose nearly 10 basis points on the day to 3.8502 percent.

Two- and 10-year euro zone government bond yields rose more than 5 basis points.