GLOBAL MARKETS-Dollar gains, stock rally ebbs after labor report

(Updates to afternoon U.S. trading)
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Herbert Lash
NEW YORK, Aug 7 (Reuters) - The dollar bounced off two-year
lows and a gauge of global equity markets halted a march toward
a record high on Friday as slightly better-than-expected data on
U.S. job growth in July also snapped big rallies in gold and the
euro.
The Labor Department report showed employment growth slowed
considerably from June amid a surge in COVID-19 cases, which is
likely to renew pressure on the White House and Congress to
reach an agreement on a new stimulus bill. Gold slid 2% to snap its record surge this week above
$2,000, the euro fell from highs against the dollar last seen in
May 2018 and U.S. Treasury yields rose to stop a downward trend
that had the benchmark 10-year note poised to fall below 0.5%.
European equities eked out modest gains, with the
pan-regional FTSEurofirst 300 index .FTEU3 adding 0.27%. But
the euro's sharpest sell-off since April helped Germany's
export-heavy DAX index .GDAXI to close up 0.66%.
Stocks on Wall Street meandered, with the S&P 500 and Nasdaq
briefly turning positive.
The Dow Jones Industrial Average .DJI fell 0.05%, the S&P
500 .SPX gained 0.04% and the Nasdaq Composite .IXIC dropped
0.44%.
Michael Brown, senior analyst at payments firm Caxton in
London, said the unemployment report painted a strong picture of
the jobs market but the economic recovery remains fragile and
dependent on the progress of the pandemic.
Financial markets are focused on the potential passage of
another stimulus bill in Congress, said Guy LeBas, chief fixed
income strategist at Janney Montgomery Scott.
"As the day goes on, we'll see more and more discussion
about how today's employment report affects those negotiations,"
LeBas said.
Also weighing on markets was U.S. President Donald Trump's
sweeping bans unveiled late Thursday on U.S. transactions with
the Chinese owners of messaging app WeChat and video-sharing app
TikTok.
In response, China said the companies complied with U.S.
laws and warned Washington would have to "bear the consequences"
of its action. Chinese stocks led losers in Asia and the yuan slumped after
Trump issued executive orders to purge "untrusted" Chinese apps
from U.S. digital networks. MSCI's benchmark for global equity markets .MIWD00000PUS
fell 0.36% to 563.12.
Latest Bank of America fund flow statistics also confirmed
the undercurrent of caution in global markets, with investors
flocking to cash, gold and investment-grade bonds and switching
out of equities. Gold XAU= hit a record high of $2,075.2 per ounce earlier
in the session, before succumbing to profit-taking.
Spot gold prices XAU= fell -1.73% to $2,027.46 an ounce.
Silver dropped 1.7% to $28.452 per ounce XAG= following
its rise to a seven-year high of $29.838.
Oil prices fell more than 1%, pulling back from a week of
gains.
Brent crude futures LCOc1 fell $0.62 to $44.47 a barrel.
U.S. crude futures CLc1 slid $0.63 to $41.32 a barrel.

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