Stocks retreat, Treasuries flail as US rate cut hopes wither
Business
Stocks retreat, Treasuries flail as US rate cut hopes wither
NEW YORK/LONDON (Reuters) - Global stocks pulled back from an all-time high on Friday after surprisingly strong US monthly jobs data dimmed hopes that the Federal Reserve would soon follow euro zone and Canadian interest rate cuts, causing Treasury yields to shoot higher.
The world's largest economy added 272,000 jobs last month, beating the 185,000 hires predicted by economists and derailing an investor consensus that the jobs market had slackened just enough to push consumer prices lower.
"This is a strong report, and it suggests that there are no signs of any cracks in the labor market," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"It's a plus for the economy and a plus for corporate earnings, but it's a negative in terms of the prospects of a rate cut perhaps as early as September."
Diminished hopes for a near-term Fed move weighed on stocks, which closed lower after a choppy session. The MSCI's world share index opens new tab dropped 0.3%, after touching a record high of 797.48 points.
Wall Street finished in the red. The S&P 500 opens new tab fell 0.1% after hitting an all-time high of 5,375.08 points. The Dow Jones Industrial Average opens new tab edged down 0.2%, and the Nasdaq Composite opens new tab also lost 0.2%.
The benchmark 10-year US Treasury yield , a benchmark for borrowing rates globally, leapt over 15 basis points after the jobs report, to 4.4335%, its biggest one-day jump in about two months.
The video player is currently playing an ad. You can skip the ad in 5 sec with a mouse or keyboard
The two-year yield, which tracks interest rate expectations , climbed nearly 17 basis points to 4.8868%, following six straight days of declines until Thursday. Bond yields rise as prices fall.
