Stock futures, dollar fall and treasuries rise on jobs

Posted 4/6/12

NEW YORK - U.S. stock futures fell, signaling more Standard & Poor’s 500 Index losses following the biggest weekly retreat of the year. Simultaneously, the dollar declined while Treasuries and gold rose after American employers added fewer jobs than forecasted in March.

S&P 500 futures slumped 1.1 percent to 1,374.90 following the benchmark index’s 0.7 percent weekly loss. All stock exchanges in the U.S., western Europe, Canada and Brazil were closed for Good Friday. Russia’s Micex Index retreated 1.7 percent.

The dollar lost as much as 1.3 percent to 81.31 yen, the lowest in a month. Yields on 10-year Treasuries fell 13 basis points to 2.05 percent. Gold for immediate delivery rose 0.6 percent to $1,640.35 an ounce.

Yields on 10-year Treasuries dropped the most this year after the U.S. Labor Department said employers added 120,000 jobs, the fewest in five months and less than the median economist forecast of 205,000 in a Bloomberg survey. The amount had exceeded 200,000 for three straight months.

“This is a real shock,” Donald Selkin, the New York-based chief market strategist at National Securities Corp., which manages about $3 billion, said in a telephone interview. “Everybody is so hung up on the 200,000 increase.”

Equity traders had 45 minutes to react to the jobs report in the U.S. Futures linked to the S&P 500 and Dow Jones Industrial Average stopped at 9:15 a.m. New York time on CME Group Inc.’s Chicago Mercantile Exchange.

Commodities, Bonds

While gold traded in London, U.S. commodity markets were shut for the holiday. The Securities Industry and Financial Markets Association recommended trading in fixed-income securities end at noon in New York, opting for an early close rather than a complete shutdown because of the jobs report.

The U.S. unemployment rate fell to 8.2 percent, the lowest since January 2009, from 8.3 percent. Faster employment growth that leads to bigger wage gains is necessary to propel consumer spending that accounts for about 70 percent of the economy.

The data also showed Americans worked fewer hours and earned less on average, helping explain why the Federal Reserve says interest rates may need to stay low at least through late 2014.

“This is not a horrible report, but it is weaker than the market has recently become accustomed to,” Thomas Simons, a government-debt economist at Jefferies Group Inc., wrote in a note to clients.

“This is going to turn up the heat on the debate for QE3 since a deceleration in the economic data has been highlighted as a prerequisite for such a program,” he said, referring to a third round of stimulus measures known as quantitative easing.

Before the U.S. jobs report, Asian stocks and South Korea’s won fell on concern Europe’s debt crisis will weigh on global growth.

The MSCI Asia Pacific Index slid 0.4 percent, and the won weakened against all 16 major peers. Taiwan’s Taiex Index rallied 0.9 percent after the finance minister said some foreign investors may be exempt from a capital-gains tax.

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