U.S. dollar jumps while bonds slump

By Herbert Lash

NEW YORK (Reuters) - The U.S. dollar gained sharply, and bond yields soared on Friday, but global stocks were little changed after some investors viewed news of slowing U.S. job losses in May as another sign of economic recovery.

Stock and oil prices initially rose on the much better-than-expected U.S. employment data, but after climbing to more than $70 a barrel, crude prices ended lower and stocks ended little changed.

While U.S. employers cut 345,000 jobs last month -- the fewest since September last year and far less than economists had forecast -- unemployment hit its highest rate in nearly 26 years, a reminder that the economy is far from recovery.

The unemployment rate raced to 9.4 percent, the highest since July 1983, from 8.9 percent in April.

"The unemployment numbers were great in that there were fewer people losing their jobs, but the rate of unemployment rose more than expected," said Phil Flynn, an analyst at Alaron Trading in Chicago.

"That is disappointing for the market as it raises worries about the long-term prospects in the job market," he said.

The Dow Jones industrial average .DJI closed up 12.89 points, or 0.15 percent, at 8,763.13. The Standard & Poor's 500 Index .SPX fell 2.37 points, or 0.25 percent, at 940.09. The Nasdaq Composite Index .IXIC fell 0.60 points, or 0.03 percent, at 1,849.42.

Investors opted to book profits from the market's recent winners -- materials, energy, financial and technology shares.