Global shares, dollar up modestly after strong jobs data

NEW YORK Sat Dec 8, 2012 4:06am IST

A holiday decoration is seen over Wall St. sign outside the New York Stock Exchange, November 27, 2012. REUTERS/Brendan McDermid

A holiday decoration is seen over Wall St. sign outside the New York Stock Exchange, November 27, 2012.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - Global shares rose modestly on Friday after a surprisingly strong U.S. jobs report for November was tempered by a drop in American consumer sentiment amid a lack of progress in talks to avert the "fiscal cliff."

The dollar edged up, though the currency was off its highs as investors parsed the details of the labor market report, one of the most closely watched economic indicators.

U.S. non-farm payrolls added 146,000 jobs last month, data showed, defying expectations of a sharp pullback related to superstorm Sandy that hit the U.S. Northeast in late October.

Uncertainty over whether U.S. lawmakers will agree on a deal to avert spending cuts and tax increases continued to keep investors on edge. Any signs of how the talks are progressing could cause more fluctuations in the markets.

"We're not as concerned as we were a few months ago because of improvement like you can see in the employment number, but there's such a wild card over the "(fiscal) cliff," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio.

"There are such concerns about what could happen that markets will be overhung until a resolution is more certain."

Republican House Speaker John Boehner accused President Barack Obama of pushing the country toward the "fiscal cliff" and wasting another week without progress in talks.

"There's total uncertainty with what's going to transpire here and abroad. Too many questions," said Warren West, principal at Greentree Brokerage Services in Philadelphia.

Wall Street ended mostly higher, with gains capped after data showed anxiety over pending higher taxes likely soured consumers' attitudes in early December.

The Nasdaq fared worse than the other major indexes, weighed down again by shares of Apple (AAPL.O), off 2.6 percent to $533.25. It was the worst week for the stock since May 2010.

The Dow Jones industrial average gained 81.09 points, or 0.62 percent, to 13,155.13. The Standard & Poor's 500 Index added 4.13 points, or 0.29 percent, to 1,418.07. The Nasdaq Composite Index dropped 11.23 points, or 0.38 percent, to 2,978.04.

The FTSEurofirst 300 index of top European shares ended up 0.07 percent at 1,132.69. The MSCI world equity index inched up 0.14 percent to 334.52.

The dollar soared to session peaks immediately following the jobs data, but the momentum faded through the day. The dollar index was up 0.2 percent.

The euro fell to a session low of $1.2878 on Reuters data, matching the low set on November 28. It was last down at $1.2925, having trimmed early losses, with traders citing a news report that senior European Central Bank Executive Board members opposed a rate cut backed by the majority at the ECB's policy meeting earlier in the week.

"Whether this reduces the likelihood of a cut going forward, the forex market perceives a more hawkish than dovish stance and created significant short covering," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co LLC in New York.

But the euro remained under pressure after Germany's central bank cut its growth outlook and pointed to risks of a recession as the three-year-old debt crisis takes its toll on the region's largest economy.

The benchmark 10-year U.S. Treasury note fell 11/32 in price to yield 1.63 percent.

Oil futures prices slipped as investors worried about Europe's economic problems and the uncertainty over U.S. budget wrangling to avert the $600 billion in tax hikes and spending cuts.

Brent crude futures dipped 1 cent to settle at $107.02 a barrel. U.S. January crude oil futures fell 33 cents to settle at $85.93 a barrel.

But gold prices rose from a one-month low after the healthy U.S. jobs data did not change the view that the Federal Reserve will keep using economic stimulus to bolster growth.

Spot gold inched up 0.2 percent to $1,702 an ounce, bouncing back from a one-month low of $1,683.79.

(Additional reporting by Richard Hubbard in London and Angela Moon, Gabriel Debenedetti and Wanfeng Zhou in New York; Editing by Dan Grebler)

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