×

GLOBAL MARKETS-Dollar, equities, bond yields climb after U.S. payrolls data

* Stocks, dollar, bond yields lifted by U.S. jobs data

* Dollar still down for the week after White House woes

* Nonfarm payrolls increase by 209,000 in July (Updates with U.S. market open, changes byline, dateline; previous LONDON)

NEW YORK, Aug 4 (Reuters) - The U.S. dollar, bond yields and stocks climbed on Friday, on the heels of stronger-than-expected U.S. jobs data, which also indicated wage growth picked up in the world's largest economy.

The U.S. Labor Department said nonfarm payrolls rose by 209,000 jobs last month. June's employment gain was revised up to 231,000 from a previously reported 222,000. The unemployment rate fell to 4.3 percent while average hourly earnings rose 0.3 percent, the largest increase in five months.

The report may pave the way for the U.S. Federal Reserve to start shrinking its $4.5 billion balance sheet.

U.S. stocks pulled back from initial highs and weighed on a gauge of world stocks, although the index remained on track for its fourth straight week of gains. The report also bolstered the dollar from 15-month lows against a basket of major currencies.

"The number of jobs created easily exceeded the expectation. Good strength in manufacturing jobs, average hourly earnings met expectations, an uptick from last month, participation rate up a tick," said David Joy, chief market strategist at Ameriprise Financial in Boston. "So all in all, a pretty strong report by almost any measure."

The Dow Jones Industrial Average rose 18.35 points, or 0.08 percent, to 22,044.45, the S&P 500 gained 3.14 points, or 0.13 percent, to 2,475.3 and the Nasdaq Composite added 8.81 points, or 0.14 percent, to 6,349.16.

Financials, up 0.97 percent, were the best performing S&P sector, but gains on the broader S&P 500 were curbed by a decline in consumer discretionary names, including a 13.00 percent drop in Viacom.

The pan-European FTSEurofirst 300 index rose 0.97 percent and MSCI's gauge of stocks across the globe shed 0.04 percent.

The FTSEurofirst was on track for its best day since July 12.

The greenback was on pace for its biggest daily percentage gain since Dec. 15 and its first weekly gain in four.

The dollar has weakened on political uncertainty in Washington, including news on Thursday that a grand jury has issued subpoenas relating to an investigation of suspected Russian meddling in the 2016 U.S. election.

The dollar index rose 0.82 percent, with the euro down 0.95 percent to $1.1755.

In bond markets, traders were betting the payrolls figures would cause the Fed to start to trim its balance sheet next month while a rate hike later this year could not be ruled out.

Benchmark 10-year notes last fell 15/32 in price to yield 2.2798 percent, from 2.228 percent late on Thursday.

Oil prices recouped earlier losses on Friday but remained on track for a weekly decline, weighed down by rising OPEC exports and strong output from the United States.

U.S. crude rose 0.39 percent to $49.22 per barrel and Brent was last at $52.19, up 0.35 percent on the day.

Gold dipped as the payrolls number boosted the dollar, with the metal on track for its first weekly fall in four.

Spot gold dropped 0.8 percent to $1,257.65 an ounce. U.S. gold futures fell 0.87 percent to $1,263.30 an ounce.

(Editing by Bernadette Baum)