Market Euphoria About Jobs Report Has Already Ebbed

NEW YORK (TheStreet) -- Investor euphoria for February's employment report already may have ebbed.

Stock futures popped and the market spiked Friday morning at the opening bell after nonfarm payrolls for February surged 236,000, up from the prior month's revised 119,000 jobs. Economists were looking for just 160,000.

Less than an hour into the trading session, the S&P 500 and the Nasdaq drifted below the flatline and the Dow Jones Industrial Average challenged its lowest levels of the day.

A robust payrolls number like the one printed Friday morning would typically encourage sizeable gains in equity markets, boosted by the promise of an improving labor market and economy amidst four years of sluggish growth. But Friday saw modest growth of less than 0.5% on the three major indices.

"Once we saw equities start to digest the jobs number a little bit more, that's when we started to see equities come off their highs and when the bottom was put in on the metals," said Phil Streible, senior commodities broker at RJO Futures. "I think that people are really not buying that number as much -- 236,000 -- and they're really thinking that there will be big revisions down when we come up with this next nonfarm payroll."

Streible was speaking about the precious metals, specifically gold, which had sold off more than $10 an ounce at the Comex division of the New York Mercantile Exchange, but surged back into green territory to settle with slight gains by the afternoon.

Gold investors have closely tracked the monthly unemployment rate since the Federal Reserve said it would peg a policy of low interest rates to the unemployment number until it dropped to at least about 6.5% (or if inflation hit 2.5%).

Despite the upbeat labor report, unemployment still remains more than one percentage point above the Fed's target, and well above pre-recession levels.