Dow flirts with 20,000, dollar gains on jobs data

THE DOW Jones Industrial Average was back on course for 20,000 on Friday. / BLOOMBERG NEWS PHOTO
THE DOW Jones Industrial Average was back on course for 20,000 on Friday. / BLOOMBERG NEWS PHOTO

NEW YORK – The latest signs of strength in the U.S. labor market reignited the dollar rally and put the Dow Jones Industrial Average back on course for 20,000. Treasuries tumbled with gold as strong hiring bolstered the case for higher interest rates.

The Dow rose within one point of the round-number milestone and the S&P 500 Index climbed to a record, as American equities headed for the best week in a month. The Bloomberg Dollar Spot Index halted a two-day slide and turned toward a 14-year high. The yield on the 10-year Treasury note jumped after falling nine basis points Thursday. Oil slipped below $53 a barrel in New York, and gold retreated from a four-week high.

Evidence of a healthy U.S. labor market helped the dollar recoup some losses as investors speculate growth in the world’s largest economy is poised to accelerate. Equities looked to break out of a monthlong range after a post-election rally stalled when the Fed raised rates and doubts arose that Donald Trump will usher in an era of higher government spending. Mohamed El-Erian said in a Bloomberg TV interview that the jobs report will encourage the Fed to proceed with raising interest rates, though he cautioned that a strong dollar could weigh on growth.

“This is quite a healthy number overall and justifies the market reaction,” said Gennadiy Goldberg, an interest-rate strategist at TD Securities. “The selloff in Treasuries has further to go. So far we’ve been trading on expectations. Once you see Congress tabling plans and Trump taking office the market could definitely react to that and extend the selloff in bonds.”

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