Global stocks, dollar, Treasury yields up after U.S. jobs report

By Sinead Carew

NEW YORK (Reuters) - Wall Street stocks rose on Friday along with the U.S. dollar and Treasury yields after data showed stronger-than-expected U.S. jobs growth but wage increases missed forecasts.

Oil prices erased the previous day's gains after a report showed U.S. production rose last week just as OPEC exports hit a 2017 high, casting doubt on efforts to curb persistent oversupply. [O/R]

U.S. Treasury debt yields and the dollar rose after falling after the data was released as investors tried to figure out how the mix of strong jobs and weak wage growth would influence the Federal Reserve's plans for an interest rate hike or balance-sheet reduction.

"The bond market has already priced in an extremely slow Fed ... It's not massively altering its course based on this report because it's kind of a mixed-bag report," said Shyam Rajan, head of U.S. rates strategy at Bank of America Merrill Lynch in New York.

Wall Street's S&P 500 stock index rose after a sell-off on Thursday as investors were reassured by the strong jobs number but bet that weak wage growth would limit Fed hawkishness.

"The fears of rates rising too quickly have dissipated and market participants are looking for bargains," said Andrew Frankel, co-president of Stuart Frankel & Co in New York.

"Maybe there was just enough bad news in a great jobs number to keep the Fed off the gas pedal," he said.

The Dow Jones Industrial Average rose 97.66 points, or 0.46 percent, to 21,417.7, the S&P 500 gained 15.72 points, or 0.65 percent, to 2,425.47 and the Nasdaq Composite added 64.63 points, or 1.06 percent, to 6,154.09.

The U.S. dollar was up 0.2 percent against a basket of currencies and on pace to post its largest weekly percentage gain since early June.

The greenback rose to two-month highs against the yen after the Bank of Japan increased its bond buying, expanding monetary policy when other central banks are moving to tighten.

"We view today's report as supportive of the Fed view that they can hike an additional time later this year, while starting to reduce the balance sheet in the fall," said Marvin Loh, senior global markets strategist at BNY Mellon in Boston.

U.S. Treasuries were up after the release of a Fed monetary policy report to Congress.

Benchmark 10-year notes were last down 7/32 in price to yield 2.3945 percent, from 2.369 percent late on Thursday.

The 30-year bond was off 21/32 in price to yield 2.9367 percent, from 2.904 percent late on Thursday.

Bets that some of the world's major central banks are moving closer to unwinding ultra-loose monetary policies have roiled markets this week as European Central Bank minutes showed policymakers are open to tightening.

In Europe, German government bond yields had risen to 18-month highs, lifting the euro but weighing on stocks.

The pan-European FTSEurofirst 300 index lost 0.12 percent and MSCI's gauge of stocks across the globe gained 0.17 percent..

U.S. crude fell 2.81 percent to $44.24 per barrel and Brent was last at $46.73, down 2.87 percent.

(Additional reporting by Sam Forgione and Gertrude Chavez-Dreyfuss in New York, Vikram Subhedar in London, Saikat Chatterjee; Editing by Jeffrey Benkoe and James Dalgleish)