NEW YORK (Reuters) – The dollar weakened further on Monday but stocks on Wall Street rose after a disappointing U.S. jobs report on Friday likely postponed the Federal Reserve’s first interest rate increase in nearly a decade.
Major European markets remained closed for the Easter holiday, limiting trading volumes.
Asian equity markets rose after U.S. Labor Department data for March showed employers added the fewest jobs in more than a year. The gain of 126,000 jobs last month was well below economists’ expectations for an additional 245,000.
ISM data on Monday showed the pace of growth in the U.S. services sector fell in March to a three-month low but a measure from Markit showed the sector expanded in March at its fastest pace since August.
Investors are concerned that a patch of soft U.S. economic data, including jobs, factory activity and consumer spending, suggests more than a winter weather-related slowdown and instead may indicate a loss of momentum in the U.S. economy.
“The market seems to be very confused whether bad or good news is good news,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.
He said investors are “unsure about whether we should be excited on bad news because the Fed will not raise rates, or if we should be seeing a stronger economy.”
The weak data eased concerns the dollar would strengthen further and pressure results of companies with international exposure.
The Dow Jones industrial average .DJI rose 90.09 points, or 0.51 percent, to 17,853.33. The S&P 500 .SPX gained 10.92 points, or 0.53 percent, to 2,077.88 and the Nasdaq Composite .IXIC added 19.90 points, or 0.41 percent, to 4,906.84.
MSCI’s all-country world index .MIWD00000PUS, a measure of stock performance in 46 countries, rose 0.77 percent.
Expectations the Fed will raise rates this year have fueled the dollar’s rally since mid-2014. Higher U.S. rates give dollar-denominated assets a yield advantage versus other currencies where interest rates are lower.
The euro EUR= held above the $ 1.10 mark, but one strategist saw dollar strength returning.
“Chalk up the euro’s strength to low volumes. It has had stiff resistance at the $ 1.1050 level, which goes back to the beginning of March,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York
“I don’t think we break through that resistance,” he said.
The euro gained 0.52 percent to $ 1.1033, while the dollar traded down 0.03 percent against the yen JPY= at 118.93 yen.U.S. Treasury debt prices fell, giving up gains from the previous session, on the unexpectedly weak nonfarm payrolls.
Yields on benchmark U.S. 10-year and two-year notes inched up from two-month lows but the trend remained negative given the uncertain rate outlook. Bond yields move inversely to prices.
“We had a big rally last Friday after the jobs report, so this is just the fading of that rally,” said David Keeble, global head of interest rate strategy at Credit Agricole in New York.
The price of U.S. 10-year Treasuries US10YT=RR fell 13/32, pushing up yields to 1.8830 percent.
Oil futures climbed more than $ 2 a barrel after Saudi Arabia raised its prices for crude sales to Asia for the second month running, signaling improved demand in the region.
Brent crude for May delivery LCOc1 rose $ 2.68 to $ 57.63 a barrel. U.S. crude for May delivery CLc1 gained $ 2.38 to $ 51.52.
(Additional reporting by Yeawon Choi in Seoul and Shinichi Saoshiro in Tokyo; Editing by James Dalgleish)