* US Feb payrolls rise; jobless rate lowest since April 09
* U.S. stocks, world stocks fall on oil gains
* U.S. dollar falls vs euro amid inflation worries
(Updates prices throughout, adds stock gains for week, other
details)
By Caroline Valetkevitch
NEW YORK, March 4 (Reuters) - World stocks and the U.S.
dollar fell on Friday as oil prices rose on escalating violence
in Libya, overshadowing a U.S. jobs report that showed the
economic recovery shifting up a gear.
Gold advanced above $1,430 an ounce and U.S. Treasury debt
prices gained as the Libyan turmoil drove a flight to safety.
U.S. crude oil prices jumped to their highest since
September 2008, and Brent crude rose above $116 a barrel as
Libyan security forces clashed with rebels near the major oil
terminal of Ras Lanuf.
The MSCI all-country world stock index <.MIWD00000PUS> was
down 0.1 percent. On Wall Street, stocks ended lower and erased
most of their gains for the week.
"It's really all about oil, and I suspect that's going to
be the pattern next week as well. Gold's uncertainty hedge and
ultimate currency roles continue to be very much in place,"
said Bill O'Neill, partner of LOGIC Advisors.
The U.S. unemployment rate unexpectedly fell and employers
added 192,000 jobs. The data had a muted impact, in part,
because the market had rallied on Thursday on expectations of
solid hiring by private employers.
The Labor Department reported hiring by U.S. employers in
February hit the highest level since last May as unemployment
dipped to 8.9 percent, an almost two-year low.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
U.S. payrolls jump, jobless rate near 2-year low
[]
INSTANTVIEW: []
SNAP ANALYSIS: U.S. jobs data showing some consistency
[]
Reuters Insider-Strong Payrolls Data Puts Focus on Fed's QE
http://link.reuters.com/mub48r
Graphic- US payrolls:
http://r.reuters.com/rud48r
Graphic- US unemployment:
http://r.reuters.com/kud48r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Fears that more geopolitical turmoil and higher oil prices
could threaten to stifle rallies in coming weeks dampened
sentiment on Wall Street. The CBOE Volatility Index VIX <.VIX>,
Wall Street's fear gauge, rose 2.7 percent to 19.11.
Among stock sectors, bank shares fell after Bank of America
Merrill Lynch said banks' first-quarter earnings could be hurt
by rising oil prices as well as by reduced client activity.
Shares of Citigroup Inc <C.N>, which the brokerage
downgraded, fell 3 percent to $4.54.
On Friday, the Dow Jones industrial average <> tumbled
88.32 points, or 0.72 percent, to end at 12,169.88. The
Standard & Poor's 500 index <.SPX> dropped 9.82 points, or 0.74
percent, to 1,321.15. The Nasdaq Composite Index <>
declined 14.07 points, or 0.50 percent, to 2,784.67.
For the week, the Dow was up 0.3 percent, while the S&P and
Nasdaq were up 0.1 percent each. The S&P 500 is up 26 percent
since the start of September when the recent rally began.
The U.S. employment data did little to alter expectations
that the Federal Reserve would maintain its loose monetary
policy, driving down the dollar down against major currencies.
The dollar index was down 0.1 percent <.DXY>.
"(Fed Chairman Ben) Bernanke may be relieved to see another
month of improvement in the unemployment rate, but given the
underlying weakness of the report, the central bank will still
argue that unemployment remains extremely high and therefore
continued stimulus could be warranted," said Kathy Lien,
director of currency research at GFT in New York.
And analysts said the dollar is likely to fall in the week
ahead as investors continue to bet that interest rates in the
euro zone will rise ahead of U.S. rates.
European Central Bank President Jean-Claude Trichet
strongly hinted on Thursday at an interest rate rise in April.
For the week, the euro gained 1.7 percent against the
dollar <EUR=EBS> on electronic trading platform EBS, the third
straight weekly gain. For the day, it was up at 1.3980 from its
Thursday U.S. close of 1.3963.
In the U.S. government debt market, benchmark 10-year notes
<US10YT=RR> rose 20/32 in price to yield 3.49 percent, down
from 3.56 percent on Thursday.
Brent crude for April delivery <LCOJ1> settled at $115.97 a
barrel, gaining 1.03 percent after rising above $116. Brent oil
has risen about 15 percent since the end of January.
U.S. crude for April delivery <CLc1> rose $2.51 to settle
at $104.42 a barrel, the highest close since September 2008.
"Tension in the Middle East is like a runaway train," said
Michael Hewson, an analyst at CMC Markets. "Once it starts,
it's very difficult to stop. And if there is a danger that it
impacts the supply chain, people will understandably get
nervous."
Three-month copper on the London Metal Exchange <CMCU3>
fell to $9,895 a tonne from $9,910 on Thursday.
In the European stock market, the FTSEurofirst 300 <>
was down 0.6 percent.
(Additional reporting by Robert Gibbons, Frank Tang and Nick
Olivari in New York; and Jeremy Gaunt and Claire Milhench in
London; Editing by Kenneth Barry)
