U.S. shares rebound on wage data; long-dated U.S. yields rise

Fri May 6, 2016 4:24pm EDT
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By Sam Forgione

NEW YORK (Reuters) - U.S. stocks ended slightly higher on Friday as investors warmed to data showing U.S. wage growth in April despite weaker-than-expected jobs growth, while the wages data also pushed longer-dated Treasury yields higher.

Nonfarm payrolls increased by 160,000 jobs last month, far below the 202,000 economists polled by Reuters had forecast on average and the fewest jobs added in seven months. The number cast doubts on whether the Federal Reserve will raise interest rates by the end of the year.

Average hourly earnings, however, rose 0.3 percent in April after a weak reading for March.

U.S. interest rates futures suggested traders see a 10-percent chance of the Fed raising rates at its June 14-15 meeting, down from 14 percent on Thursday, Reuters data showed.

U.S. shares edged up on the day but posted losses for the week, while European shares posted their biggest weekly percentage decline since early February. Hedge fund Man Group was among the worst performers in Europe, down 8.6 percent after Citigroup cut its rating on the stock to "sell" from "buy."

Longer-dated Treasury yields rose on signs of wage growth, with 30-year yields last at 2.622 percent after dropping to a more than two-week low of 2.568 percent.

"The market was moving into oversold territory and poised for a bounce," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. "It’s the market in essence looking at the report, and looking at the wage growth in the report, which suggests that the foundation for consumer spending remains intact."

MSCI's all-country world equity index was down 0.08 points or 0.02 percent at 395.34, and posted its biggest weekly percentage decline since early February.   Continued...

People walk through the lobby of the London Stock Exchange in London, Britain August 25, 2015.  REUTERS/Suzanne Plunkett