GLOBAL MARKETS-Stocks fall as Nasdaq slides, dollar eases on jobs data

Reuters - UK Focus

* Wall St touches record high, then retreats on Nasdaq slide

* Dollar slips as solid U.S. jobs data suggests less

stimulus

* Brent rises from 5-month low to above $106

* Bond yields dip after data, fears of early rate hike ease

(Adds oil settlement)

By Herbert Lash

NEW YORK (Frankfurt: HX6.F - news) , April 4 (Reuters) - A slide in biotech stocks

pulled Wall Street and a measure of global equities lower on

Friday despite a solid U.S. jobs report that weakened the dollar

on views that the Federal Reserve will keep scaling back its

stimulus.

The U.S. bond market surprisingly rallied, particularly

five-year Treasury notes, which had been weak lately on fears

the Fed could raise interest rates earlier than anticipated.

The FTSEurofirst 300 index of European shares

touched a peak last seen in 2008 on the jobs data and closed

higher, marking nine straight gains and three consecutive weeks

of higher closes.

But stocks on Wall Street retreated after stabilizing

earlier in the week as momentum stocks such as biotechs fell for

a second straight session. The Nasdaq biotech index lost

3.95 percent and the Nasdaq composite fell 2.5 percent, pulling

down U.S. stocks and global equities.

"You've got some big names in there. There is a high

correlation inside of those groups," said Keith Bliss, senior

vice-president at Cuttone & Co in New York. "Managers tend to

trade the entire group as opposed to individual names. So that

of course, is hitting the Nasdaq and everybody else."

Equities had opened higher on optimism spurred by the U.S.

nonfarm payrolls report, which showed jobs increased by 192,000

in March, just shy of the 200,000 forecast, after rising 197,000

in February. The unemployment rate was unchanged at 6.7 percent.

With a solid pace of hiring for a second month, the U.S.

economy appears to be recovering from a winter slowdown.

A smaller survey of households, from which the unemployment

rate is derived, showed a much bigger surge in employment. That

jump was met by a rise in the number of people entering the

labor force, a show of confidence in the U.S. job market.

The percentage of working-age Americans with a job reached

its highest level since the summer of 2009.

"Overall, people are taking this as a sign there isn't some

sort of underlying weakness in the economy," said Kate Warne,

investment strategist at Edward Jones in St. Louis.

"It has fit into people's belief that most of the weakness

we saw earlier was due to the weather and not something really

changing about the economy."

The S&P 500 hit a record high before retreating. MSCI (NYSE: MSCI - news) 's

all-country world stock index fell 0.3 percent.

The Dow Jones industrial average fell 145.74 points

or 0.88 percent, to 16,426.81, the S&P 500 lost 21.59

points or 1.14 percent, to 1,867.18 and the Nasdaq Composite

dropped 102.385 points or 2.42 percent, to 4,135.355.

Bond prices rose, with the 5-year up 12/32 in

price to yield 1.7055 percent. The benchmark 10-year U.S.

Treasury note rose 17/32 in price to yield 2.7261

percent.

"This (jobs) number doesn't give any reason to move up the

Fed timing of rate hikes, which is what was feared most," said

John Briggs, U.S. rates strategist at RBS (LSE: RBS.L - news) in Stamford,

Connecticut.

The FTSEurofirst 300 index closed up 0.56 percent at

1,352.78.

The dollar was choppy against the euro and declined against

other major currencies despite the solid U.S. jobs gains.

The jobs report will likely encourage the Fed to continue

reducing, or tapering, its massive monetary stimulus, according

to Anthony Valeri, investment strategist at LPL Financial (NasdaqGS: LPLA - news) in San

Diego.

"It's a Goldilocks report, not too warm and not too cold,

and puts pressure on the next report in May to be good," Valeri

said. "It doesn't change the pace of tapering and shows the

economy is still on track."

The greenback was up 0.17 percent against the euro at

$1.3695. It fell 0.51 percent to 103.38 against the Japanese yen

after hitting a session high of 104.12 yen in trading

immediately after the employment report.

Brent crude rose above $106 a barrel as expectations of a

deal to reopen vital Libyan oil ports were offset by doubts that

a lasting resolution was imminent.

Brent crude settled up 57 cents at $106.15 a barrel.

U.S. crude, or West Texas Intermediate, rose 85 cents to

settle at $101.14 a barrel.

(Reporting by Herbert Lash; additional reporting by Marc Jones

in London; Editing by Bernadette Baum, Meredith Mazzilli and Dan

Grebler)

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