Treasuries and gold surged, while the dollar slid and stocks fluctuated, as weaker-than-forecast U.S. jobs data spurred bets the Federal Reserve will undertake more monetary stimulus. The euro climbed as plans to contain the credit crisis sent Spanish and Italian bonds higher.
Ten-year Treasury yields fell seven basis points to 1.61 percent and gold futures increased 1.4 percent to $1,729.70 an ounce, the highest since March, as of 9:57 a.m. in New York. The Dollar Index (DXY), a gauge of the currency against six major peers, slid 0.7 percent to the lowest level since May as the euro rallied 1 percent. The Standard & Poor’s 500 Index climbed 0.1 percent to 1,434.12 after the benchmark gauge yesterday surged to the highest level since January 2008.
America added 96,000 workers last month following a revised 141,000 rise in July that was smaller than first estimated, trailing the median estimate of economists surveyed by Bloomberg for a gain of 130,000. Unemployment unexpectedly fell to 8.1 percent as more Americans left the workforce, and hourly earnings were unchanged. Fed Chairman Ben S. Bernanke said last week he wouldn’t rule out more stimulus to bolster a job market he described as “a grave concern.’
‘‘It’s a disappointing report across the board and it puts the Fed in the driver’s seat for additional quantitative easing,” said Chad Morganlander, a Florham Park, New Jersey- based fund manager at Stifel Nicolaus & Co., which oversees about $120 billion of assets. “It’s not a negative number, but there is very little vibrancy to the report and the trend is dismal. It lacks the get-up-and-go that we need to get the economy moving again.”
The S&P 500 surged 2 percent yesterday as the European Central Bank announced plans for unlimited bond purchases to stem the debt crisis and ADP Employer Services reported faster- than-forecast growth in jobs.
While the S&P 500 in August reached its highest level on an intraday basis since 2008, yesterday was the first time it closed at a multi-year high since April. The index has risen almost 14 percent this year as European leaders worked to tame the region’s debt crisis and the Fed vowed to safeguard the economic recovery.
Yields on Spanish and Italian 10-year notes are headed for the steepest weekly drop in at least a year and default risk tumbled after ECB President Mario Draghi announced the bond- buying program for struggling nations.
Two shares gained for every one that fell in the Stoxx 600. The volume of shares changing hands on the Stoxx 600 was more than double the average of the last 30 days, data compiled by Bloomberg show. A measure of banks led gains, with Portugal’s Banco Espirito Santo SA surging 8.7 percent and Germany’s Commerzbank AG rising at least 6 percent.
The MSCI Emerging Markets Index (MXEF) climbed 1.9 percent, the most in six weeks. South Korea’s Kospi (KOSPI) index jumped 2.6 percent after Fitch Ratings upgraded the country’s debt. India’s Sensex jumped 2 percent and benchmark gauges in Russia, Hungary and the Czech Republic rose more than 1 percent.
To contact the reporters on this story: Nikolaj Gammeltoft in New York at firstname.lastname@example.org; Michael P. Regan in New York at email@example.com
To contact the editor responsible for this story: Lynn Thomasson at firstname.lastname@example.org