Investor excitement over jobs report quickly dissolves into rate fears

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Investors’ excitement over today’s better-than-expected jobless numbers lasted less than two hours.

The Dow Jones industrial average jumped more than 150 points out of the gate this morning after the government reported that employers slashed only 11,000 jobs last month, far fewer than the 125,000 economists had predicted.

Like awakening to a big present under the Christmas tree, that sparked thoughts of a solidly rebounding U.S. economy and potentially more resilient consumer.

But the burst of euphoria quickly gave way to fear that the Federal Reserve could step in sooner than expected to raise interest rates, perhaps by midyear. High rates, of course, clip corporate earnings and thus can suppress stock values.

The idea of a rate hike is feeding a robust rally in the dollar. The so-called dollar index, which measures the greenback against other major currencies, is up 1.3%, its best day since June.

Higher rates would attract investors back to the U.S., which would mean exchanging other currencies into the dollar.

The dollar rally also is hitting gold prices. Gold is down about 3.5%.

As of 9:20 a.m., the Dow was off about 8 points to 10,358.14.

-- Walter Hamilton