Treasuries Fall With Gold, Stocks as Dollar Gains on Jobs Report

New York (Nov 8)  Treasuries sank the most in two months and U.S. equity futures, European stocks and gold fell as a bigger-than-forecast jump in American payrolls boosted speculation the Federal Reserve may trim stimulus earlier than expected. The dollar strengthened against all 16 major peers.

The yield on 10-year Treasuries jumped 12 basis points to 2.72 percent at 8:59 a.m. in New York. The Stoxx Europe 600 Index slid 0.8 percent and Standard & Poor’s 500 Index futures slipped 0.2 percent. The yield on 10-year French securities climbed six basis points to 2.21 percent after S&P downgraded the country’s debt. The dollar climbed 0.3 percent against the euro. Gold dropped 1.5 percent to $1,290 an ounce. AT&T (T) Inc. and BNP Paribas SA led 21 billion euros ($28 billion) of bond sales in Europe this week, the busiest in two months. And silver dropped 1.1 percent to $21.46 in by 09:30am EST.

Employers in the U.S. added 204,000 workers last month, the Labor Department said, following a revised 163,000 gain in September that was larger than initially estimated. The median forecast of 91 economists surveyed by Bloomberg called for a 120,000 advance. Data yesterday showed faster-than-estimated economic growth. France’s rating was lowered to AA from AA+ at S&P.

“For markets it shows that the labor market continues to tighten and should bring forward people’s estimates of when the Federal Reserve will have to reduce bond purchases,” said David Kelly, the chief global strategist at JPMorgan Funds in New York, which oversees about $400 billion in long-term assets. “Ultimately this is good news for the economy. I think in the long run it’s good news for the stock market.”