NEW YORK (CNN/Money) -
Bond prices surged Friday after a report showed far fewer jobs were created in November than expected, and the dollar struck a new low against the euro, reversing a brief rally that began late Thursday.
The benchmark 10-year note jumped 1-8/32 points to 99-30/32 to yield 4.26 percent late Friday, down from 4.40 percent late Thursday. The 30-year bond surged a whopping 2-1/32 points to 106-15/32 to yield 4.93 percent, down from 5.05 percent Thursday. Bond prices and yields move in opposite directions.
The two-year note added 8/32 of a point to yield of 2.93 percent, while the five-year note gained 22/32 of a point to yield 3.59 percent.
Non-farm payrolls rose by 112,000 in November from a downwardly revised 303,000 gain in October, far short of the 180,000 forecast by Wall Street.
The unemployment rate fell to 5.4 from 5.5 percent, in line with expectations, but weekly earnings and workweek figures were also weaker than expected.
The soft data helped cool fears that the economy was ramping up so fast that the Federal Reserve would have to hike interest rates aggressively. It also eased worries over rising inflation, which bond traders fear because it erodes the value of their investments.
Investors were so focused on the subpar employment report that they shrugged off the Institute for Supply Management report showing solid growth in the services sector.
"This is one of the days when nobody is really going to care because the employment report was definitely weak," Cary Leahey, senior U.S. economist at Deutsche Bank, told Reuters.
While the Labor Department report sparked a bond rally, it pushed the dollar to a new low against the euro because it cast doubt on the nation's economic recovery.
The euro bought a record $1.3459 late Friday. The greenback's slide reversed gains made late Thursday when it traded at $1.3269, as fears of dollar-buying intervention and a sharp fall in oil prices convinced traders that it was a good time to take profits.
But the sell-off resumed Friday after a German newspaper cited a high-ranking U.S. Treasury official as saying the United States would intervene to support the dollar only after the euro reached $1.45.
Against the Japanese yen, the dollar bought ･102.06, down from ･103.20 late Thursday.
-- from staff and wire reports