* Stocks waver after softer-than-expected US job report
* Euro at nearly four-month low on European debt concern
* Copper rally cools
(Updates with U.S. markets, changes byline, dateline,
previous LONDON)
By Al Yoon
NEW YORK, Jan 7 (Reuters) - The euro struggled to stay
above the key $1.30 level against the dollar on Friday as
investors braced for upcoming bond sales from the more
debt-stricken euro zone countries.
Meantime, global equities struggled to find direction as a
softer-than-expected U.S. labor market report cooled some of
the economic optimism that has fueled a rally since November.
Copper prices eased on concerns about demand.
U.S. non-farm payrolls increased by 103,000 in December,
the government said, falling short of a Reuters poll that
forecast 175,000 new jobs last month. For details, see
[]
However, the jobless rate fell to 9.4 percent, its lowest
in more than 1-1/2 years, while payroll numbers in October and
November were revised upward.
"You can't ignore the fact that, regardless of a
disappointing payrolls outcome, U.S. growth is still looking
better than Europe, and the euro sovereign stress is still
there," said Richard Franulovich, senior currency strategist at
Westpac in New York.
The Dow Jones industrial average <> rose 8.97 points,
or 0.08 percent, at 11,706.28. The Standard & Poor's 500 Index
<.SPX> was up 1.27 points, or 0.10 percent, at 1,275.12. The
Nasdaq Composite Index <> added 1.60 points, or 0.06
percent, at 2,711.49.
Europe's FTSEurofirst 300 <> rose 0.2 percent,
fighting off a short bout of selling after the U.S. data.
World stocks measured by MSCI All-Country World Index
<.MIWD00000PUS> were little changed. Japan's Nikkei average
<> edged up 0.1 percent to an eight-month high.
The dollar rose, taking its cue from the revisions in the
U.S. jobs report that seemed to underscore that a broader
economic recovery was intact.
Earlier, investors sold bonds of the most indebted euro
zone governments before a series of issues next week. An
European Union proposal that could force those who lend to
banks to bear big losses if they fail also helped knock the
single currency lower across the board. []
Portugal, widely seen as the next euro zone state that
could need a bailout after Greece and Ireland, will lead a
series of debt auctions from European nations next week.
[]
"Next week's supply in Spain, Portugal and Italy will be a
good test of investor sentiment," said Nick Stamenkovic,
strategist at RIA Capital Markets in Edinburgh.
Risk premiums on Portugal's 10-year government bonds over
benchmark German Bunds <PT10YT=TWEB><DE10YT=TWEB> rose 15 basis
points to 4.33 percentage points. while those on 10-year
Spanish bonds <ES10YT=TWEB> over Bunds widened. The five-year
cost of insuring Portugal's debt against default rose by 15
basis points to 540 basis points.
"The rising yields at debt auctions in the euro zone will
continue to spook investors for a while, and it's best to stay
away from peripheral stocks such as Spanish and Portuguese
banks until mid-year, when the crisis should ease," said Arnaud
Scarpaci, fund manager at Agilis Gestion in Paris.
The U.S. currency was off 0.1 percent against a basket of
major currencies <.DXY>.
The euro <EUR=> slid 0.25 percent to $1.2968. Against the
Japanese yen, the dollar <JPY=> fell 0.17 percent at 83.20.
Many analysts said markets had become so upbeat on the
payrolls that there was room for disappointment. Some pointed
to a note of caution from new U.S. claims for jobless benefits,
which rose more than expected last week.
U.S. Treasury debt erased losses after the employment
report fanned hopes the U.S. Federal Reserve will stick to an
ultra-easy monetary policy.
Benchmark 10-year Treasury note yields were little changed
at 3.40 percent after soaring as much as 1 percentage point
since October on signs of economic recovery.
In commodities, copper hit a two-week low on talk that top
consumer China may be preparing to tighten monetary policy, and
gold slipped for the fifth day in a row.
Copper <CMCU3> fell for the fourth straight session and was
set for a 2.7 percent drop for the week.
U.S. light sweet crude oil <CLc1> rose 71 cents, or 0.8
percent, to $89.09 per barrel, and spot gold <XAU=> fell $3.10,
or 0.23 percent, to $1367.90.
(Additional reporting by Anirban Nag, William James, Atul
Prakash and Dominic Lau in London; editing by Jeffrey Benkoe)
