Major stock markets tumbled, the dollar fell, while Treasury prices rallied on Friday after a much weaker-than-expected U.S. jobs report added to fears the U.S. economic recovery was losing steam.
Brent crude oil fell to a five-month low as bleak U.S. jobs data and bulging inventories dimmed the outlook for economic growth and fuel demand. Safe-haven gold prices rose.
U.S. employers hired at the slowest pace in nine months in March, adding just 88,000 nonfarm jobs, the Labor Department said, below an expected 200,000. The jobless rate ticked a tenth of a point lower to 7.6 percent, but largely due to people dropping out of the work force.
"The report will fuel concerns about another spring swoon for the economy, the adverse impact of Congressional dysfunction and, more generally, the weak underlying dynamism of the economy," said Mohamed El-Erian, co-chief investment officer at Pacific Investment Management Company.
The report followed a string of disappointing data this week on U.S. manufacturing, private sector hiring and services activity, raising concern the recent rally in equities has outrun the economic fundamentals.
The data "adds concerns about fundamentals to concerns we had about prices having gotten ahead of themselves, which creates the potential for even further declines," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio.
The MSCI world stocks index .MIWD00000PUS slipped 0.8 percent to 353.59 points.
U.S. stocks dropped more than 1 percent. The benchmark S&P has shed 1.8 percent this week, by far its worst weekly decline of 2013.
The Dow Jones industrial average .DJI dropped 151.44 points, or 1.04 percent, to 14,454.67. The Standard & Poor's 500 Index .SPX lost 18.19 points, or 1.17 percent, to 1,541.79. The Nasdaq Composite Index .IXIC fell 47.61 points, or 1.48 percent, to 3,177.37.
European shares .FTEU3 tumbled 2 percent to 1156.83 points.
BONDS RALLY
The dollar .DXY fell 0.3 percent against a basket of major currencies to 82.453, on expectations the Federal Reserve will continue its bond-buying program, or quantitative easing. The euro rose 0.6 percent to $1.3018.
"The market is assured that the Fed will not be taking its foot off the QE gas pedal anytime soon," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.
"This number is seeing follow-through in dollar weakness and I expect that to continue against all countries who are not embarking on QE of their own."
The yen remained weak after the Bank of Japan's aggressive monetary easing a day earlier. The dollar was last up 0.8 percent at 97.08 yen, having risen to 97.19 in Asian trading, the strongest since August, 2009.
The euro rallied 1.3 percent to 126.27 yen.
U.S. Treasuries rallied and yields fell to their lowest levels of the year, after the jobs data. Weaker global equity markets, the Bank of Japan's monetary stimulus program, and escalating tension in the Korean peninsula also encouraged investors to buy bonds.
The benchmark 10-year Treasury note was 17/32 higher after the report, easing its yield to 1.71 percent.
The price of the 30-year Treasury bond extended an early gain to two points, pushing its yield down to 2.87 percent from 2.99 percent late on Thursday.
"A ton of traders must have fallen out of their seats this morning after seeing this weak jobs report," said Thomas DiGaloma, managing director at Navigate Advisors LLC in Stamford, Connecticut.
German Bund futures extended gains to hit their highest level since June 2012 at 146.54, up 58 ticks on the day.
Brent crude fell $1.49 to $104.85 a barrel. U.S. crude dropped 95 cents to a low of $92.31.
Spot gold rose to $1,564 an ounce from $1,552.71.
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