FINANCIAL MARKETS : Good Jobs News Puts Wall Street in Gloomy Mood : Markets: Bond yields jump, while stocks and the dollar weaken. Fears of a Fed hike in interest rates are back.

In trading action that has become all too familiar to investors this year, stock and bond markets sold off Friday on upbeat news about the economy.

The government’s report that the nation added more than a quarter of a million jobs in July fueled a surge in bond yields, as investors focused on the likelihood of another official interest rate hike by the Federal Reserve Board.

The 30-year Treasury bond yield, a benchmark for long-term interest rates such as mortgage rates, rocketed to 7.54% from 7.40% on Thursday.

The stock market suffered relatively little, with the Dow Jones industrial average off 18.77 points at 3,747.02. But the negative mood on Wall Street was apparent as losing stocks outnumbered winners by 13 to 8 on the Big Board.

Many analysts believe that the July employment report was strong enough to reignite inflation worries at the Fed. The central bank has tightened credit four times this year, but the latest jobs data suggests that the economy is still growing faster than the Fed desires. Rapid growth can push up prices and wages, boosting inflation.

On Friday, Clinton Administration officials stressed that inflation remains moderate, even as hiring picks up. But the employment report shows that the hourly earnings of non-farm, non-supervisory workers rose 0.4% to $11.12 in July, an increase that disturbed some bond traders.

Just a week ago, bond yields had plunged after the government reported slower-than-expected growth in second-quarter gross domestic product. And last week, a host of other economic indicators pointed to slower growth in June.

But Friday’s employment report was the first important look at July economic activity, and its strength hinted that the economy picked up again after the spring slowdown.

“Certainly it’s strong enough to make the Fed seriously consider” higher interest rates, said Bill Newman, investment strategist at brokerage Kidder Peabody.

The Fed’s policy-making committee meets Aug. 16. Many Wall Streeters expect the Fed to boost short-term rates by as much as half a percentage point.

Reflecting those fears, short-term bond yields rose faster than long yields Friday. The yield on six-month Treasury bills surged to 5.11% from 4.90% on Thursday. The yield on two-year T-notes jumped to 6.23% from 5.97%.

The renewed rise in bond yields comes at an inopportune time for the Treasury, which next week will auction $40 billion in new bonds to raise cash.

In the stock market, meanwhile, the damage Friday was fairly light considering bonds’ losses. Trading volume on the NYSE was only 230 million shares, and most major indexes lost less than the Dow. The Nasdaq composite index of mostly smaller stocks, for example, eased just 1.51 points to 718.67.

Analysts noted that many market players are away from the action on summer Fridays. Some Wall Streeters also say stock investors are growing weary of the bond market’s constant swings and may not be moved by them unless yields jump to new highs.

Among Friday’s highlights:

* Industrial stocks, many of which have rallied recently on healthy quarterly earnings reports, were hit by profit taking.

Caterpillar dropped 2 7/8 to 104 3/4, Fluor sank 2 3/8 to 51 5/8, Alumax fell 7/8 to 29 3/4, Varity declined 1 7/8 to 34 1/2 and Cummins Engine sank 1 5/8 to 38 1/8.

* Financial stocks, which normally react badly to rising interest rates, were mixed. Morgan Stanley lost 1 3/8 to 62 5/8 and First Interstate Bancorp fell 1 to 72 3/4, but Chase Manhattan inched up 1/8 to 35 5/8 and Glendale Federal rose 1/2 to 12 7/8.

* Some technology stocks showed strength. Compaq leaped 1 3/8 to 33 5/8 after executives made upbeat comments about strong demand and declining computer inventories. Also, Scientific Atlanta, a supplier of equipment for cable TV and telecommunications industries, soared 4 3/4 to 39 after reporting that quarterly earnings more than doubled.

Other tech winners included Intel, up 7/8 to 58 1/8; Lotus, up 1 to 34 3/8, and Sybase, up 1 1/4 to 38 1/4.

* On the merger front, wireless communications firm NexTel Communications gained 1 1/8 to 26 3/4 after announcing it will buy Dial Page. Dial Page, which traded as high as 61 earlier this year, fell 1 3/8 to 30 5/8 on the merger terms.

* Among Southland issues, Kaiser Resources lost 1 to 8 1/4. Cincinnati-based Pacholder Associates, which owns 21.7% of Kaiser’s stock, said it would seek representation on the board as part of its efforts to boost the stock.

In foreign trading, Mexico City shares zoomed again, with the Bolsa index up 69.16 points at 2,642.97, its highest level since Feb. 28. The market has been rocketing on optimism about the upcoming presidential elections and economic prospects.

In London, the FTSE-100 index gained 17.0 points to 3,167.5, while Frankfurt’s DAX average inched up 1.40 points to 2,184.76.

In Tokyo, the Nikkei average lost 155.14 points to 20,521.70.

In U.S. currency trading, the dollar failed to get a lift from renewed speculation about another Fed credit-tightening move.

In New York, the dollar eased to 1.581 German marks from 1.588 on Thursday, and to 100.25 Japanese yen from 100.38.