* US dollar surges, boosted by US private-sector jobs data
* Crude oil falls below $89 a barrel on dollar's strength
* Wall Street flat as data offsets decline in commodities
* Bonds turn negative after strong U.S. economic data
(Adds ISM report)
By Herbert Lash
NEW YORK, Jan 5 (Reuters) - The U.S. dollar jumped and
stocks equities pared losses on Wednesday after surprisingly
strong data on private sector jobs added another sign to
growing evidence the U.S. economy is fully on the path to
recovery.
The dollar was on pace for its best one-day gain in more
than three months against the yen and in more than two weeks
against the euro after U.S. private employers added 297,000
jobs in December, nearly triple analysts' forecasts.
The strong dollar pressured commodity prices, with copper
prices tumbling from a record the previous day, crude oil down
from 27-month highs and gold down in its biggest three-day
slide since mid-November.
The U.S. dollar index <.DXY> gained more than 1.0 percent.
The unexpectedly large monthly jump in U.S. private sector
jobs as reported by ADP Employer Services led German bunds to
turn negative and the price of U.S. Treasury securities to
fall.
When the Institute for Supply Management later said its
index of U.S. services sector activity rose to 57.1 in
December, up from expectations of 55.6, global equities trimmed
losses and turned some U.S. and European stock indices
positive.
"It really flows into this narrative that we're seeing
improvements across all sectors of the U.S. economy," Greg
Salvaggio, vice president of trading at Tempus Consulting in
Washington, said about the ISM report.
"And really the ADP jobs report this morning reinforces the
view that companies are beginning to hire again," he said.
World stocks, as measured by MSCI <.MIWD00000PUS>, were
down about 0.7 percent, bit within a few points of highs last
seen in the third quarter of 2008.
On Wall Street the Dow Jones industrial average <> was
down 26.64 points, or 0.23 percent, at 11,664.54. The Standard
& Poor's 500 Index <.SPX> was down 1.98 points, or 0.16
percent, at 1,268.22. The Nasdaq Composite Index <> was up
1.03 points, or 0.04 percent, at 2,682.28.
In Europe, pan-regional Europe's FTSEurofirst 300 <>
pared losses and was down 0.4 percent, but the FTSE 100 <>
in London was up about 0.1 percent.
Analysts said the ADP survey bodes well for U.S. Labor
Department data due Friday on nonfarm payrolls for December.
Some economists revised upward their forecast for Friday's
data, which is expected to show gains of 140,000 overall jobs.
The dollar was up against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 1.06 percent at 80.284.
The euro <EUR=> slid 1.20 percent at $1.3142, and against
the yen, the dollar <JPY=> rose 1.28 percent at 83.08.
The strong dollar sapped investor appetite for crude oil
and other commodities, despite signs of tighter oil supply
fundamentals in the world's top consumer, the United States.
Oil staged a sharp rally in late December, helping to make
commodities the top performing asset class in 2010, but prices
have since retreated as part of a wider commodities sell-off.
U.S. crude futures <CLc1> to an intra-day trough of $88.10
a barrel, the lowest since Dec. 20.
Spot gold prices <XAU=> fell $11.56 to $1,368.60 an ounce.
The benchmark 10-year U.S. Treasury note <US10YT=RR>
slipped 17/32 in price to yield 3.4027 percent.
Earlier, Japan's Nikkei <> closed down nearly 0.2
percent after hitting a 7-1/2 month closing high on Tuesday.
(Reporting by Rodrigo Campos, Gertrude Chavez-Dreyfuss and
Emily Flitter in New York; Emma Farge and Silvia Antonioli in
London; Writing by Herbert Lash)
