Treasuries Slide on Jobs Growth as U.S. Stocks Fluctuate
Treasuries fell for a fourth day, while oil and the dollar rose after stronger-than-forecast jobs growth fueled optimism in the American economy. U.S. stocks were little changed as Russia said it may cut Ukraine’s gas supplies.
Treasury yields increased five basis points to 2.79 percent as of 4 p.m. in New York. The Bloomberg Dollar Spot Index was up 0.2 percent, while the ruble headed for a fourth weekly decline of more than 1 percent. The Standard & Poor’s 500 Index (SPX) rose less than 0.1 percent. Copper futures capped the biggest loss in more than two years, while West Texas Intermediate crude increased 1 percent.
The Labor Department said employers added 175,000 jobs in February, topping the median forecast of economists for 149,000 and signaling the economy is starting to bounce back from a weather-induced setback. Russia said Ukraine must pay off almost $2 billion it owes it for natural gas by today and signaled it may cut supplies, ratcheting up the pressure on its cash-strapped neighbor. China’s onshore bond market had its first default.
“The more we can add jobs and get the economy to organically grow through traditional measures is a wonderful thing and equity markets are reacting to this as we expected,” Darrell Cronk, the New York-based regional chief investment officer at Wells Fargo Private Bank, which manages $170 billion, said by phone. “We want this economy to stand on its own two feet. We want this to be a self-sustaining growth engine.”
Global stocks have risen for the past five weeks as concern eased that Russia’s incursion into Ukraine would spark a broader conflict. Ukraine, a key transit nation for east-west energy supplies, is struggling to keep hold of Crimea after pro-Russian forces seized control of the peninsula. The West has urged Russia to pull back, and began yesterday to impose sanctions.
The S&P 500 rallied 1 percent in the past five days, capping a second weekly gain. More than $4 trillion has been added to equity values around the world since the Feb. 4 low to a record $63 trillion.
Among U.S. shares moving today, Safeway Inc. slid 2.2 as investors weighed potential antitrust hurdles to an offer for the company. Nike Inc. rose 1.6 percent on a report the company signed quarterback Johnny Manziel to a marketing deal.
Investment flowing into exchange-traded funds focused on real estate this year has already eclipsed the 2013 total as concern over rising interest rates subsides and property markets improve. In 2014, 31 percent of money going into U.S. sector-focused ETFs, or $3 billion through March 6, was for real estate, according to data compiled by Bloomberg.
The Stoxx Europe 600 Index slipped 1.3 percent. The U.S. sent six F-15 fighter jets to Lithuania and will dispatch 12 additional F-16s to Poland, the two countries’ defense ministries said yesterday. The U.S. Navy sent the guided-missile destroyer USS Truxtun into the Black Sea in what it called a routine visit unrelated to events in Ukraine.
“There’s definitely concern about the Russia-Ukraine thunderstorm rolling back into the market,” Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co., which oversees about $150 billion, said in a telephone interview. “That in itself is causing some uncertainty among investors. The economy is continuing to gradually improve. We’ve had very good market performance over the last several weeks in spite of great uncertainty on the geopolitical front.”
The dollar rose to a six-week high against the yen, increasing 0.2 percent to 103.33 yen. The Chinese yuan posted its biggest weekly gain since October on speculation the central bank has ceased engineering a decline in the currency to discourage one-way appreciation bets.
Russia’s Micex Index has declined 7.3 percent this week. The ruble weakened 0.6 percent to 42.6825 against Bank Rossii’s target basket of dollars and euros.
Russian stocks finished their worst week since President Vladimir Putin cracked down on protesters following his election in May 2012. Putin’s incursion into Ukraine’s Crimea region, like the imprisonment of demonstrators following his return to the presidency two years ago, is sparking investor concern that Russia’s economic growth will falter as the U.S. and Europe threaten the country with sanctions.
President Barack Obama’s administration restricted visas for Ukrainian and Russian officials whom it said threaten the former Soviet republic’s sovereignty. Lawmakers in Ukraine’s Crimea region called a referendum to return the Black Sea peninsula to Russian control.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong rose 0.4 percent, trimming this week’s decline to 1.8 percent. The Shanghai Composite Index lost 0.1 percent as investors weighed reform prospects at a legislative meeting.
Shanghai Chaori Solar Energy Science & Technology Co. won’t make an interest payment in full by the deadline, the company’s vice president Liu Tielong said. The company blamed the failure of an agreement to sell a power station to Greece for its failure to meet interest payments, state-owned Xinhua News Agency reported, citing an unidentified person at Chaori.
The first onshore default comes as China’s benchmark rate for loans between lenders was set for the biggest weekly drop this year after the central bank scaled back cash withdrawals in its money-market operations.
Copper futures for delivery in May slid 4.2 percent to settle at $3.0825 a pound. Stockpiles tracked by the Shanghai Futures Exchange gained 4.6 percent to 207,320 tons this week, the highest in 10 months.
India’s S&P BSE Sensex (SENSEX) Index climbed 3.8 percent this week, the most since April. The country’s current-account deficit dropped to a four-year low in the fourth quarter, the Reserve Bank of India said March 5.
Indonesia’s rupiah rose to the highest since November and is 1.5 percent stronger this week, making it the best performing Asian currency versus the dollar in the last five days.
To contact the reporter on this story: Michael P. Regan in New York at email@example.com