* Dismal U.S. jobs data for December rekindles fears
* U.S., European stocks fall, government debt prices rise
* Dollar rises vs euro but falls against yen on jobs data
* Oil prices slide as economic data suggests deep slowdown
(Recasts with U.S. markets, changes dateline; previous
LONDON)
By Herbert Lash
NEW YORK, Jan 9 (Reuters) - Global stocks fell while the
dollar and bond prices rose on Friday after data showing deep
U.S. job losses in December underscored the toll the recession
may take on corporate profits and the struggling economy.
Oil prices fell more than 5 percent to below $40 a barrel
at one point as a jump in the December unemployment rate to 7.2
percent -- the highest since January 1993 -- deepened the
already dark outlook for the consumer-driven U.S. economy.
While payrolls were slashed a bit less than forecast,
economists had expected a lower jobless rate of 7 percent.
Chevron Corp <CVX.N> led a slide in energy shares on both
sides of the Atlantic after it joined a growing list of
companies issuing profit warnings.
U.S. technology shares also took a beating, causing the
Nasdaq to briefly wipe out year-to-date gains as such tech
bellwethers as Apple Inc <AAPL.O> fell.
"We just keep seeing bad news. That's all we ever see,"
said Ryan Detrick, senior technical strategist at Schaeffer's
Investment Research in Cincinnati, Ohio. "We really have to see
the economy, housing show some type of life."
Shortly before 1 p.m., the Dow Jones industrial average
<> fell 100.91 points, or 1.15 percent, to 8,641.55. The
Standard & Poor's 500 Index <.SPX> slipped 13.80 points, or
1.52 percent, at 895.93. The Nasdaq Composite Index <>
shed 30.69 points, or 1.90 percent, at 1,586.32.
Chevron stock fell 1.4 percent, while Apple shares shed 1.9
percent.
In Europe, the FTSEurofirst 300 index <> of top
shares fell 0.5 percent to close at 866.95 points, ending the
first full week of trading in 2009 with a 1.2 percent gain.
U.S. and euro zone government debt prices rose after the
dismal U.S. jobs report, and grim European manufacturing data
for November signaled the region is also sinking further into
recession.
Expectations the tough employment environment will mean a
very large government stimulus package and a vast issuance of
new government debt reined in U.S. price gains.
"The severity of the decline (in payrolls) indicates that
government is going to step up spending, which is going to keep
deficits very high," said Mary Ann Hurley, vice president of
fixed-income trading at D.A. Davidson & Co in Seattle.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
23/32 to yield 2.36 percent and the 2-year U.S. Treasury note
<US2YT=RR> gained 5/32 in price to yield 0.76 percent.
Oil prices fell. U.S. light sweet crude oil <CLc1> was down
$1.55 to $40.15 a barrel.
The dollar rallied in volatile trading, with investors
relieved that the U.S. jobs report was not as dismal as many
had feared.
Traders had positioned themselves for a gruesome non-farm
payrolls number following a U.S. private sector jobs report
earlier this week showing hefty losses of 693,000.
"The dollar has dodged an economic bullet," said Nick
Bennenbroek, head of currency strategy, at Wells Fargo in New
York. "Even though the report was generally discouraging, the
headline payrolls decline was broadly as forecast."
The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 1.04 percent at 82.423. Against
the yen, the dollar <JPY=> fell 0.97 percent at 90.19.
In Europe, data showed German industrial output slumped 10
percent on the year, its fastest pace of decline since 1993,
while in France it fell a record 9 percent and in Spain by 15.1
percent.
"The financial crisis has pushed the German industry into a
condition of shock and awe," said Carsten Brzeski, economist at
ING Financial Markets. "In terms of economic growth, the fourth
quarter of 2008 will make history as the worst quarter ever."
The euro <EUR=> fell 1.81 percent at $1.3477.
U.S. gold futures rose after initially tracking currency
movements. Gold for February delivery <GCG9> gained $7.30 at
$861.9 an ounce
The MSCI index of stocks in the Asia-Pacific region outside
Japan <.MIAPJ0000PUS> slipped 0.7 percent and Japan's Nikkei
share average <> finished 0.45 percent lower.
(Reporting by Ellis Mnyandu, Gertrude Chavez-Dreyfuss, Chris
Reese and Frank Tang in New York, and Christopher Johnson,
Kylie MacLellan and Brian Gorman in London; writing by Herbert
Lash; Editing by Dan Grebler)
