* Doubts over U.S. economic outlook still dominate
* Dollar rises but on course for worst week in 6 years
* U.S. yields rise to day's high
By Anirban Nag
LONDON, Feb 5 (Reuters) - The dollar rose against a basket
of currencies on Friday along with Treasury yields, but global
stocks fell after a key U.S. jobs report painted a mixed picture
of the labour market and left investors with a muddled view on
rate hike prospects.
Non-farm payrolls increased by 151,000 jobs last month, well
below forecasts of 190,000 while the unemployment rate was at
4.9 percent, the lowest since February 2008, the Labour
Department said on Friday. Surging wages also suggested the
labor market recovery remains on track. ECONUS
After the report, Fed funds futures contracts showed traders
are pricing in a 40 percent chance that the Federal Reserve will
next raise rates in December. Before the report they expected
the Fed to wait until well into next year before raising rates.
"The market is looking at different things, we've got the
headline, which is a little bit softer, and the average hourly
earnings that are much better," said Aaron Kohli, interest rate
strategist at BMO Capital Markets, New York.
U.S. stock index futures 1YMc1 ESc1 NQc1 turned
negative after the data while European stocks also fell.
The dollar index rose 0.6 percent to 97.05 .DXY , having
endured a pretty rough week. The dollar has shed 2.7 percent
this week as expectations that the Fed would raise rates at
least once this year evaporated on signs of domestic weakness
and broader concerns over global growth.
After a weak service-sector business sentiment report on
Wednesday and dovish comments from New York Federal Reserve
chief William Dudley, U.S money markets predicted no rise in
official interest rates this year. The Federal Reserve's own
forecasts called for four increases.
U.S. bond yields US10YT=RR rose after the jobs report,
with the 10-year yield rising to 1.87 percent. Still, it has
fallen by 10 basis points since the start of this month.
(Editing by Toby Chopra)