(Updates to U.S. market open)
* U.S. dollar sees fourth week of losses, bond yields fall
* U.S. payrolls rise beats estimates, hourly earnings fall
* Oil up after U.S. flags sanctions on Iran
By Dion Rabouin
NEW YORK, Feb 3 The U.S. dollar headed for its
fourth straight weekly loss and bond yields fell on Friday after
wage growth slowed in the monthly employment report, suggesting
the Federal Reserve may not raise interest rates again soon
Stock prices rose though on the creation of more jobs than
expected in the U.S. Labor Department jobs data, while President
Trump's executive order to review banking regulations introduced
after the 2008 crisis also boosted financial sector stocks.
U.S. non-farm payrolls increased by 227,000 jobs last month,
the largest gain in four months, but the unemployment rate rose
one-tenth of a percentage point to 4.8 percent and wages
increased only modestly, suggesting that there was still some
slack in the labor market.
"The payrolls report is a mixed bag," said Omer Esiner,
chief market analyst at Commonwealth Foreign Exchange in
"It's certainly reassuring to see the upside surprise in
hiring. More importantly we saw a rise in labor force
participation (which) could be a signal that workers that had
been sidelined may be more encouraged to look for jobs. That's a
The Dow Jones Industrial Average rose 175.57 points,
or 0.88 percent, to 20,060.48, the S&P 500 gained 16.18
points, or 0.71 percent, to 2,297.03 and the Nasdaq Composite
added 24.68 points, or 0.44 percent, to 5,660.87.
U.S. Treasury yields fell on the disappointing wage growth
numbers, indicating inflation may not rise at a pace that would
lead the Federal Reserve to raise interest rates soon as
"Most of the disappointment is really focused around the
inflation pressures that would presumably force the Fed to act,"
said Aaron Kohli, an interest rate strategist at BMO Capital
Markets in New York.
Benchmark 10-year Treasury prices rose 11/32 to yield 2.43
percent and the lower yields undermined the U.S. dollar,
which had risen in early trading on expectations of a solid
The U.S. currency has been hit by uncertainty about policy
direction created by President Trump's flurry of executive
orders in recent weeks after an initial burst of enthusiasm for
the new administration's promises of tax reform, infrastructure
spending and financial deregulation.
Sterling steadied after its worst fall since October,
while the euro was set for its sixth week of gains in
seven, at $1.0790 and having gone as high as $1.0829 after the
latest signs that growth and inflation are rising in the euro
European stocks gained broadly with the STOXX 600
up 0.6 percent, bouncing back from losses seen in the previous
session. The index remains negative for the week as caution
about the impact of Trump's policies has weighed on a rally in
Euro zone corporate earnings have been strong so far and a
survey on Friday showed euro zone businesses started 2017 by
increasing activity at the same multi-year record pace they set
in December and faster growth in demand suggested the good times
Chinese stocks slumped, sending Asian markets skidding for
their biggest losses in two weeks after Beijing unexpectedly
raised short-term interest rates to slow capital flight, adding
to growing concerns about Trump's aggressive policies.
MSCI's all-world stock index, which tracks bourses in 46
markets around the globe, rose 0.6 percent, on pace for its
third day of gains and its largest one-day percentage gain in
more than a week.
Oil prices rose after U.S. threats of new sanctions against
Iran. Comments by Russian Energy Minister Alexander Novak that
oil producers have cut their output in accordance with a pact
agreed in December also helped to support prices.
Crude futures were up 1.1 percent with Brent crude
set to gain more than 2 percent for the week.
London copper fell, however, after China's
tightening of policy spooked metals markets.
Gold rose 0.3 percent.
(Reporting by Dion Rabouin; Additional reporting by Vikram
Subhedar in London and Danilo Masoni in Milan; Editing by Mark
Heinrich and Clive McKeef)