U.S. stock index futures turned lower and interest rates spiked after the government reported a brighter-than-expected report on the labor market.
The data had a net 204,000 new jobs created last month, easily beating the 120,000 number anticipated, while the unemployment rate rose to 7.3 percent. Economists polled by Reuters expected the U.S. economy to have added 125,000 jobs in October compared with 148,000 in September.
"This is an unexpectedly large beat for a report we expected to fall short," emailed Dan Greenhaus, chief global strategist at BTIG LLC. But, given the likely impact of the government shutdown, "we have to wait until November's report to get a fuller picture of what's happening this fall," he added.
The report, the latest clue as to whether the U.S. economy is improving, comes as investors look for more signs on when the U.S. Federal Reserve will begin winding down its $85-billion-a-month bond-buying program after the central bank held policy unchanged last week.
The data follows stronger-than-expected gross domestic product data on Thursday, which showed the economy expanded 2.8 percent in the third quarter, which fueled global market fears of early tapering by the U.S. Federal Reserve.
On Thursday, the Dow Jones Industrial Average fell 1 percent, the S&P 500 took its worst hit in ten weeks and the Nasdaq skidded 2 percent following the data. Asian and European stocks also traded lower on Friday as fears spread that the central bank could taper sooner than expected.
The yield on the 10-year Treasury note that figures into mortgage rates and other consumer loans rose 12 basis points to 2.73 percent.