Big Friday looms for markets with report due on December jobs
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The dollar rallied, gold eased and Treasury bond yields declined Thursday as investors positioned themselves for the week’s big economic number: the U.S. report on December employment, due Friday morning.
Stocks finished mostly lower. The Dow Jones industrials snapped a four-day winning streak to end with a loss of 25.58 points, or 0.2%, to 11,697.31, after hitting a two-year high Wednesday.
Analysts are expecting the government to report a healthy increase in new jobs last month. The average forecast of economists in a Bloomberg News survey is for an net increase of 150,000 nonfarm positions. Private-sector payrolls alone are expected to be up 175,000.
November’s jobs data, however, were a disappointment, with increases of just 39,000 nonfarm jobs and 50,000 private-sector positions. Those numbers are expected to be revised higher Friday.
Better-than-expected figures for December could make the stock market happy because that would reinforce the idea that the economic recovery is picking up steam.
The dollar also could strengthen further on an upbeat jobs number -- although a rising dollar could be a negative for U.S. exporters at some point.
The buck got a lift Thursday in part on renewed worries about Europe’s government debt crisis. The euro slid 1.1% to $1.300, down from $1.315 on Wednesday and the lowest since it briefly fell to $1.298 on Nov. 30.
The dollar’s strength since the new year began has helped fuel profit-taking in commodities, which tend to attract more investors and traders when the greenback weakens. Gold fell $2 to $1,371.40 an ounce Thursday, the third straight decline. The metal is down 3.6% since it closed at a record high of $1,422.60 an ounce Monday.
Treasury bond yields slipped Thursday after rising sharply on Wednesday. Bond yields have jumped over the last three months as much of the economic data have pointed to a stronger recovery, even though employment gains have lagged.
The 10-year T-note yield ended at 3.40% on Thursday, down from 3.48% on Wednesday.
The T-note hit a seven-month high of 3.54% in mid-December and has mostly treaded water since then -- in part waiting to see whether optimism about the economy would be confirmed by employment data.
A hefty gain in December jobs could drive more investors out of bonds on the assumption that interest rates would continue to rise with an improving economy -- even though the Federal Reserve is trying to restrain longer-term rates with its bond-buying program.
-- Tom Petruno