New York - A surprisingly strong payrolls report in the United States on Friday failed to entice investors into stocks even as equities appeared oversold globally following a near 5-percent drop to start the year.
Brent crude oil extended its weekly slide to more than 10 percent, pressured by unrelenting oversupply and a bleak demand outlook.
Stocks had opened higher on Wall Street after data showed the economy created many more jobs than expected in December and previous months were revised higher.
But the S&P 500 hit its session high, up 0.9 percent on the day, within five minutes of the open and traded near session lows in late afternoon, down 0.5 percent.
“The market's reaction (to the jobs report) is something between curious and concerning,” said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago.
“People are skittish in holding positions. If you are long stocks, you think you might be saved by this jobs report. If they don't go up, you are in trouble.”
Investors fear that China, the second-largest economy in the world, is growing more slowly than expected and could further weigh on commodity prices and global economic growth.
The Dow Jones industrial average fell 91.64 points, or 0.55 percent, to 16 422.46, the S&P 500 lost 11.05 points, or 0.57 percent, to 1 932.04 and the Nasdaq Composite dropped 15.87 points, or 0.34 percent, to 4 673.55.
Stocks and other risk assets got support earlier from Asian markets after China nudged the yuan higher for the first time in nine days, easing fears that it had lost control of the currency, and as the Chinese stock benchmark rose 2 percent.
Europe initially followed suit, but the pan-European FTSEurofirst 300 index closed down 1.5 percent and lost 6.7 percent this week.
MSCI's broadest gauge of stocks globally was little changed on the day and on track to fall 5.5 percent this week, the most since September 2011.
“What's going to come out of China is a short-term concern for the market, so maybe the 5-percent decline we've seen is not quite enough,” said Andrew Slimmon, a Chicago-based portfolio manager at Morgan Stanley Investment Management, which manages more than $400 billion in assets.
“But what's most important is the payroll numbers coming out today highlight that the economy in the US has not in any way derailed.”
He said concerns are only near-term and the beginning of earnings season will “remind investors that the US micro story hasn't changed.”
Traders are indeed more concerned near-term, with the spot price of the CBOE volatility index higher that futures three month down the line.
NO RESPITE FOR OIL
After reaching a 12-year low on Thursday, Brent crude rose as much as 2.9 percent but was last down 0.8 percent on the day at $33.49 per barrel.
West Texas Intermediate fell 0.3 percent to $33.16 a barrel after gaining more than 3 percent earlier.
The benchmark US Treasury yield was near its session low, the lowest since late October, following an initial rise after the strong jobs data.
Hourly earnings were unchanged versus expectation of a 0.2 percent increase.
Continued safety bids also kept yields from climbing.
“The average hourly earnings pushes rate hikes back at the margin, but the payrolls number pushes them forward, so the market is putting those two elements together and concluding that the message is pretty neutral,” said David Keeble, head of US rates strategies at Credit Agricole Corporate and Investment Bank in New York.
US 10-year Treasury notes were up 8/32 in price to yield 2.1244 percent on Friday, from 2.153 percent late Thursday.
The dollar climbed on measures taken by China to ease this week's market turmoil and on the payrolls data in the United States, but gains were limited by worries over whether Beijing has done enough to calm its battered stock market.
The euro was down 0.2 percent against the dollar at $1.0909, while the greenback was little changed versus the yen at 117.58.
Spot gold fell for the first time this week but was on track to post its largest weekly percentage gain since August.