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US stocks decline, treasuries fall on jobs data; gold rises

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[NEW YORK] US stocks retreated for a fourth day, while Treasuries fell and the dollar weakened against the yen as a slowdown in jobs growth coupled with accelerating wage gains did little to alter views on the timing for higher interest rates.

The S&P 500 Index pushed its losing streak to the longest since February as earnings disappointed and employers added the fewest jobs in seven months. Emerging-market shares had the worst week since January. The drop in Treasuries sent yields higher, while the dollar headed for an 18-month low. Gold rose on speculation the Federal Reserve won't rush to raise rates. Crude climbed toward US$45 a barrel.

"This report wasn't a disaster, it wasn't booming, but it wasn't awful either," said John Canally, chief economic strategist at LPL Financial in Boston, which oversees about US$460 billion.

"If you're a bear you see some things in here and if you're a bull you see some others. It's more of the same. Things are soft, but not a disaster."

A retreat in global equities gathered pace in the first week of May as data highlighted the fragile state of the world economy, a slew of mixed earnings offered scant evidence of corporate strength, and investors questioned whether central banks can spur growth. Traders reduced wagers that the Fed will proceed with rate increases in coming months.

"The top worry is still slower growth than feared and central banks which might stay too passive or even lose the market's confidence of being in charge," said Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany.

"We are on thin ice already and we don't need more disappointment as the Fed is eyeing the job market very closely."

The S&P 500 Index fell 0.3 per cent at 12:48 pm in New York. It's headed for a fourth day of losses that is the longest slide since Feb 11. The gauge has retreated 2.9 per cent since reaching a two-month high on April 20.

It's fallen 1.2 per cent this week, set for the first back-to-back slides in three months.

Health-care shares led losses on Friday, with Endo International Plc slumping to a seven-year low after the painkiller maker cut its full-year earnings forecast to well below analysts' predictions, dragging down stocks from other pharmaceuticals companies.

The Stoxx Europe 600 Index fell 0.4 per cent, extending its weekly drop to 2.9 per cent, the most since February. The gauge fell 2.9 per cent in the week, its biggest loss since the worst of the slump in February, as worries resurfaced about global-growth prospects.

An index of emerging markets retreated 0.6 per cent, extending this week's loss to 4.5 per cent, the most since January and trimming the gain in 2016 to 1.1 per cent.

Turkish assets tumbled amid political turmoil. The Borsa Istanbul 100 Index fell 9 per cent, heading for its worst week since August 2011, and the biggest drop among 90 equity indexes tracked by Bloomberg worldwide.

The MSCI Asia Pacific Index slid 0.5 per cent, for a 3.3 per cent weekly decline. The Shanghai Composite Index slipped 2.8 per cent, while Japan's Topix index fell 0.1 per cent as trading resumed following a three-day break. 

The Bloomberg Dollar Spot Index swung between gains and losses Friday, on course for a weekly advance of 1.3 per cent. The dollar weakened 0.6 per cent to 106.66 yen, after reaching the lowest level since October 2014 on May 3.

The Japanese currency jumped 5 per cent last week, prompting policy makers to warn of possible intervention, as the Bank of Japan unexpectedly refrained from adding to record stimulus at a policy review.

The MSCI Emerging Markets Currency Index slid 0.3 per cent, bringing this week's loss to 1.7 per cent. Russia's ruble led declines on Friday, dropping 0.5 per cent. For the week, South Africa's rand sank 5.2 per cent, the most among 24 emerging markets.

Oil pared a weekly decline after slower US job growth data did little to alter views on the timing for higher interest rates. West Texas Intermediate for June delivery rose 25 US cents to US$44.57 a barrel Friday on the New York Mercantile Exchange.

Futures are down about 2.9 per cent this week and look set to end four weeks of consecutive gains Gold headed for the biggest gain in a week after the jobs report weakened the case for the Federal Reserve to raise interest rates. Gold futures for June delivery rose 1.3 per cent to US$1,288.90 an ounce.

Copper headed for the biggest weekly loss since 2014 amid mounting concerns about the strength of demand in China, where authorities have taken steps to cool a speculative frenzy.

Treasuries fluctuated, with 10-year yields near the lowest in almost a month at 1.76 per cent. Investors have been buffeted by mixed signals as they seek clues about the Federal Reserve's monetary policy path.

Global bond yields tumbled to near an all-time low as slow price growth and central-bank stimulus put the market at odds with Federal Reserve officials who are signaling another interest-rate increase may come as soon as their next policy meeting in June.

A selloff in German government bonds was stopped in its tracks this week, with 10-year securities heading for their best week since January. The euro region's benchmark sovereign debt was set for the first week of gains since early April as a retreat in oil prices and faltering stock markets damped demand for riskier assets.

BLOOMBERG