Treasury yields and the dollar jumped as faster-than-forecast growth in American jobs bolstered optimism in the world’s largest economy. U.S. stocks pared early gains after the Standard & Poor’s 500 Index rose to within 1% of its 2007 record.
Ten-year Treasury yields added five basis points to 2.05% at 10:58 a.m. in New York, near the highest in 11 months. The Dollar Index climbed to the strongest level since August as the yen dropped to its weakest since 2009. The Standard & Poor’s 500 Index gained 0.1% to 1,546.35 after rising as high as 1,551.65. Cocoa, gasoline and cotton jumped at least 1.3%, while losses in Brent crude and industrial metals dragged the S&P GSCI Index of commodities lower.
Treasury yields and the dollar extended gains as government data showed the U.S. economy created 236,000 posts in February, while the unemployment rate unexpectedly slipped to 7.7%. Federal Reserve policy makers at their last meeting debated curtailing bond-buying that is seen as debasing the dollar, a move Chairman Ben S. Bernanke has opposed as he seeks to drive down unemployment at 6.5%.
“They were great numbers relative to where we’ve been, but the question is whether they were too good, too fast in the eyes of the Fed,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said by telephone. His firm oversees $250 billion. “Markets have been very focused in the last few weeks, since the FOMC minutes came out, on trying to figure out just how much longer accommodation will be present,” he said. “It continues to be live by the Fed, die by the Fed.”
Two-year Treasury note yields increased for a fourth straight day, rising one basis point to 0.26%. Thirty- year bond rates added five basis points to 3.25%, climbing for a fifth day to an 11-month high. The gap between yields on two- and 10-year notes widened to as much as 1.82 percentage points, the most since April 2012.
The dollar strengthened against 12 of 16 major peers, surging 1.4% to 96.16 yen and adding 0.9% to $1.2990 per euro, near its strongest level of the year.
The Dow Jones Industrial Average has set a record for four consecutive days. McDonald’s Corp., Caterpillar Inc. and Walt Disney Co. led the 30-stock gauge’s advance today. Pandora Media Inc. surged 17% today after the Internet radio service said Joe Kennedy has resigned as chairman and chief executive officer.
The Stoxx Europe 600 Index extended its five-day rally to 2.1%, its biggest weekly advance in two months. A gauge of lenders contributed the most to the equity benchmark’s advance today as DNB ASA, Norway’s largest bank, jumped 4.5% after increasing its lending rates. The Norwegian government has proposed stricter rules for lenders to cool down the housing market. Credit Suisse Group AG added 3.8% after UBS AG recommended buying the shares.
Lagardere SCA rallied 4.8% after the publisher of Paris Match magazine returned to profit in 2012. Fugro NV surged 14%, the biggest advance in the Stoxx Europe 600, after the oilfield surveyor announced net income for 2012 that exceeded analysts’ estimates and a bigger dividend than expected.
The yen weakened against all of its 16 major peers after Japan’s Ministry of Finance said the deficit in the current account, the widest measure of trade, increased to 364.8 billion yen ($3.8 billion) in January, from 264.1 billion yen in December.
The Nikkei 225 Stock Average rallied 2.6%, closing above the level before Lehman Brothers Holdings Inc. filed for bankruptcy in 2008. Another report showed Japan’s economy grew at an annual rate of 0.2% in the fourth quarter, compared with a preliminary calculation of a 0.4% contraction. China’s exports in February beat economists’ estimates, while imports plunged.