US stocks fall on interest rate fears

Wall Street and the Treasury market ended the first week of 2007 with sharp losses today after a surprising surge in new jobs and wages diminished investors’ hopes for an interest rate cut.

The markets shuddered at the Labour Department’s report that US employers increased their payrolls by 167,000 in December and boosted workers’ hourly wages by 0.5%. The unemployment rate, meanwhile, held steady at a historically low 4.5%.