U.S. jobs report boosts investor optimism

BOSTON, Aug 6 - A positive jobs report spurred Wall Street to push some stocks and Treasuries higher on Friday, but investor optimism was tempered by looming inflation, declining Federal Reserve stimulus and the spread of the Delta variant of the coronavirus.

Nonfarm payrolls increased by 943,000 jobs in July after rising 938,000 in June, the Labor Department said in its closely monitored employment report on Friday. The economy also maintained its strong momentum amid demand for workers in labor-intensive services industries. Economists polled by Reuters had forecast payrolls rising by 870,000 jobs.

It's a number that's hard to say anything but positive things about, Sameer Samana, a market analyst at Wells Fargo Investment Institute in St. Louis, said in an interview. Especially with Delta variant kind of perking up, it would be much more impressive for the market to have a very strong economy.

Even so, shares were marginalized. The Dow Jones Industrial Average fell 55.29 points or 0.31% to 37,174. 54, the S&P 500 gained 4.76 points, or 0.11%, to 4,433. 86, and the Nasdaq Composite 14.28 points, or 0.3%, rose to 110,29 points.

Peter Cardillo, an economist with Spartan Capital Securities in New York, said the job number was temporary but that it indicated inflation has more staying power and is not necessarily solid.

Treasury yields extended their gains, had already been helped by the drop in jobless claims.

Benchmark 10-year Treasury yields rose to 1.2835%, approaching a week high after their U.S. close at 1.217% on Thursday and helped the dollar, which rose against the yen to a week high.

The strength of hiring calls into question the rally in treasuries which took place over the last few months, said Mike Bell, a market strategist at J.P. Morgan Asset Management, in an email. We expect this to be the start of a sustained move higher in treasury yields over the rest of the year.

Oil prices dropped again Friday, set for the biggest weekly loss since October after previous falls in the week triggered by rising COVID - 19 cases and a surprise build in U.S. crude stockpiles.

U.S. crude dropped 0.56% to $68.70 barrel and Brent did $71.09, down 0.28% the day before.

The dollar crept higher on Friday, supported by the positive jobs report, which bolstered the case for rapid U.S. policy tightening. The dollar index was last increased in midmorning trading about 0.512, or 0.555%.

The stronger dollar and potential for higher yields hurt gold. Spot gold decreased 2.2% to $1,764. 80 an ounce, and U.S. gold futures fell 2.37% to $1,762. 30 an ounce

Ether, the second largest cryptocurrency, fell about 2% as of Friday morning, one day after a major firmware upgrade to its underlying ethereum blockchain, expected to stabilize transaction fees and reduce supply of the token.