(Adds close of U.S. markets)
* U.S. job growth slows; jobless rate plunges to 4.2%
* Stocks, bonds yields slide in volatile trade
* U.S. 10-year yields fall to 1.35%, lowest in 10 weeks
* Dollar little changed, gold rises more than 1%
By Herbert Lash and Lewis Krauskopf
NEW YORK, Dec 3 (Reuters) - Global equities and benchmark
U.S. bond yields tumbled on Friday in volatile trade after data
showed U.S. job growth slowed considerably in November and the
Omicron variant of the coronavirus kept investors on edge.
Nonfarm payrolls increased by 210,000 jobs, the fewest since
last December, but the unemployment rate plunged to a 21-month
low of 4.2% and 594,000 people entered the labor force, the most
in 13 months, indicating a rapidly tightening labor market.
Despite weak jobs growth, solid details in the Labor
Department report suggested Federal Reserve plans to accelerate
tapering of its bond purchases and expectations for multiple
rate hikes next year remained intact.
The yield on 10-year U.S. Treasury notes fell
9.8 basis points to 1.351% and the tech-heavy Nasdaq Composite
stock index slid almost 3% at one point as investors anticipated
slower economic growth next year.
"The market is saying the Fed is going to make a serious
policy error by raising rates too quickly," said Joe LaVorgna,
chief economist for the Americas at Natixis. "Everything is
working toward a much weaker growth backdrop; that is what the
market senses, and the virus is occurring in the backdrop."
The Treasury yield curve measuring the gap between yields on
two- and 10-year Treasury notes, seen as an
indicator of economic expectations, narrowed to 77.0 basis
points, down from almost 130 points in early October.
Recent global economic growth projections from the
International Monetary Fund are likely be downgraded due to the
emergence of the Omicron variant, said IMF Managing Director
Kristalina Georgieva.
Omicron has gained a foothold in many countries worldwide
and many governments have restricted travel rules to curb the
variant.
"The top issue is still this whole Omicron variant. There
are enormous amounts of uncertainty there," said Randy
Frederick, vice president of trading and derivatives for Charles
Schwab in Austin, Texas.
Oil prices fell and gold prices rose almost 1% as the plunge
in U.S. Treasury yields boosted the safe-haven metal's appeal.
MSCI's all-country world index fell 0.81%
and the broad STOXX Europe 600 index closed down 0.6%.
Stocks on Wall Street pared heavy, earlier losses. The Dow
Jones Industrial Average closed down 0.17%, the S&P 500
fell 0.84% and the Nasdaq Composite lost 1.92%.
The safe-haven Japanese yen and Swiss franc gained as market
sentiment soured.
The dollar index, which tracks the greenback versus a
basket of six currencies, rose 0.07% to 96.161.
The euro gained 0.06% to $1.1306, while the yen
fell 0.36% to $112.7400.
Crude prices ended little changed after erasing gains of
more than $2 a barrel on growing worries that rising coronavirus
cases could reduce global oil demand.
Crude prices edged higher after producer group OPEC+ said it
could review its policy to hike output at short notice if a
rising number of pandemic lockdowns chokes off demand.
Brent futures rose 21 cents to settle at $69.88 a
barrel, while U.S. West Texas Intermediate (WTI) crude
ended 24 cents lower at $66.26 a barrel.
U.S. gold futures settled 1.2% higher at $1,783.90 an
ounce.
Bitcoin fell 5.00% at $53,720.0400.
(Reporting by Herbert Lash, with additional reporting by Karen
Pierog in Chicago, Dhara Ranasinghe in London; Editing by
Richard Chang)