NEW YORK, March 9 — Investors stretched record-breaking stock rallies yesterday, before Wall Street took profits, while US Treasury yields dipped after not-too-hot, not-too-cold US jobs data reinforced the conviction that the Federal Reserve will begin easing by mid-year.

Two US stock indexes advanced into uncharted territory after the Labour Department said US job growth accelerated in February, even as the unemployment rate jumped and wage gains moderated. The mixed report kept on the table an anticipated interest rate cut in June by the Fed.

But the S&P 500 and the Nasdaq reversed course while the Dow Jones Industrial Average did not reach a record high. The Dow fell 68.66 points, or 0.18 per cent, to close at 38,722.69, the S&P 500 lost 33.67 points, or 0.65 per cent, to close at 5,123.69 and the Nasdaq Composite .IXIC lost 188.26 points, or 1.16 per cent, to close at 16,085.11.

"I don’t think this is anything other than taking a little money off the table. I don’t think it does anything for the momentum,” said Scott Wren, Senior Global Market strategist, Wells Fargo Investment Institute in St. Louis. "Now, do I think there’s a probability we see a decent pull back, five or 10 per cent, over the course of next month or two? I do.”

With the widely anticipated payrolls number out of the way, attention immediately turned to next Tuesday’s US Consumer Price Index inflation report.

This week, central bankers from the United States and Europe raised expectations that cuts in borrowing costs will begin in the summer on both sides of the Atlantic, pushing stock indices to new highs again on Friday.

A day after the European Central Bank held rates steady, ECB policymaker Francois Villeroy de Galhau said there would be a rate cut in the spring, which he defined as from April until June 21, the date of the central bank’s meeting that month.

Markets have priced in a Fed rate cut in June as well. Some traders even bet on a May rate cut by the Fed after US employers added a surprisingly robust 275,000 jobs last month, even while figures for prior months were revised down to show fewer job gains.

"The immediate takeaway is the focus on the unemployment rate going from 3.7 per cent to 3.9 per cent,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.

"More unemployment rate implies that the economy is slowing, which would, in the markets’ view hopefully, necessitate a rate cut sooner rather than later.”

MSCI’s gauge of stocks across the globe rose to its highest level ever then closed off 0.27 per cent.

In Europe, the STOXX index of 600 companies hit a new lifetime high, ending just 0.02 per cent higher, while Europe’s broad FTSEuroFirst 300 index slipped 0.03 per cent.

While central banks on both sides of the Atlantic manage expectations of exactly when they will start lowering borrowing costs, investors pushed up the yen after reports that Japan’s central bank may begin hauling up rates from negative territory as soon as this month.

MSCI’s broadest index of Asia-Pacific shares outside Japan went up 1.01 per cent, while Japan’s Nikkei rose 90.23 points, or 0.23 per cent.

The dollar headed for its sharpest weekly drop of the year on the growing likelihood of lower borrowing costs.

Against the Japanese yen, the dollar weakened 0.66 per cent to 147.05. The dollar index, a basket comprised of six currencies from major US trade partners, fell 0.03 per cent. Its largest component, the euro, fell 0.06 per cent to US$1.0939 (RM5.12).

Hopes of rate cuts put downward pressure on US government bond yields. The yield on benchmark US 10-year notes fell to its lowest since February 2 but in late trade was only down 0.3 basis points from Thursday at 4.089 per cent.

The 2-year note yield, which typically moves in step with rate expectations, fell to its lowest since February 7, and was last 2.4 basis points lower at 4.4902 per cent.

German bund yields were on track to record their biggest weekly fall since mid-December on raised bets of an ECB cut in rates.

Spot gold logged another record and added 0.87 per cent to US$2,177.99 an ounce. US gold futures gained 0.92 per cent to US$2,177.80 an ounce.

US crude settled down 1.17 per cent at US$78.01 a barrel and Brent fell to US$82.02 per barrel, down 1.12 per cent to on the day.

In cryptocurrencies, bitcoin popped to a record high, after a three-day breather since setting its last one. It briefly topped US$70,000 for the first time and was up 2.90 per cent at US$69,298.00 in late trade. Ethereum rose 2 per cent at US$3952.4. — Reuters