Wall Street, dollar rise after robust U.S. payrolls

By Herbert Lash

NEW YORK (Reuters) - Strong U.S. labor market data for January lifted Wall Street stocks and drove up government bond yields on Friday as investor expectations of a Federal Reserve move to raise interest rates by midyear increased.

U.S. job growth rose solidly and wages rebounded strongly, while data for November and December was revised to show a whopping 147,000 more jobs created than previously reported, THE Labor Department said in its monthly nonfarm payrolls report.

European equities rebounded on the news, the dollar strengthened and oil futures rebounded from near-six-year lows.

"For now, all systems are go. This is a great reason to buy, especially since the stock market is the only place you can find yield right now," said Todd Schoenberger, managing partner of LandColt Capital LP in New York.

Wall Street's somewhat weak response to the strong data raised some concerns about the U.S. equity market's strength.

"The reason the market is being held back is the realization that this puts the Fed in play (to hike rates) for probably June 2015," said Phil Orlando, chief equity strategist at Federated Investors in New York. "There was a growing feeling that the Fed had moved into 2016 based upon some of these weak data points we've seen in recent weeks."

The Dow Jones industrial average rose 51.41 points, or 0.29 percent, to 17,936.29. The S&P 500 gained 7.09 points, or 0.34 percent, to 2,069.61 and the Nasdaq Composite added 12.65 points, or 0.27 percent, to 4,777.75.

MSCI's all-country world stock index fell 0.04 percent, and the FTSEurofirst 300 index of top European shares rose 0.33 percent to 1,492.65 points.

Brent crude was on track for the biggest weekly rise since 2011 as fighting in Libya and the strong economic signals from the United States.

Benchmark Brent crude traded $1.30 higher at 57.87 a barrel. U.S. crude for March delivery traded at $51.71 per barrel, up by $1.23.

U.S. Treasury yields jumped and the yield curve flattened on the jobs data.

"By any measure, this was an extremely good report," said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York.

Benchmark 10-year note yields fell 31/32 in price to yield 1.9237 percent, while 30-year bond yields increased to 2.5083 percent.

The dollar index was up 1.14 percent at 94.624, while against the yen, it rose 1.34 percent to 119.08

The euro was down 1.28 percent at $1.1328.

(Reporting by Herbert Lash)