Stocks bounced around in morning trading, but the Dow Jones Industrial Average has battled back and is holding modest gains midday.

Stock index futures rallied before the stock exchanges opened after the Labor Department reported that the US economy lost 345,000 jobs in May. The number was significantly better than the 520,000 loss economists had expected.

However, investors sold into the early strength, as the news sparked a sharp rise in bond yields and a rally the dollar, which also sent crude oil and gold prices sharply lower. After hitting a high of $70 in early trading, crude fell into the red shortly after the payroll data.

Another reversal in mid-morning trading helped lift the equity market and the situation had stabilized by midday. Crude is back to unchanged at $68.80. Gold is still reeling, down $21.40 to $96.90 on dollar strength.

The buck is still holding higher ground, as higher bond yields attracts flow to the buck. The dollar is up 1.45 to 98.07 on the yen. The euro is taking a hit and dipped back below 1.40 against the greenback.

Meanwhile, the benchmark ten-year Treasury is down 23/32nd, but well off session lows. The yield on the ten-year is at 3.83 percent, up from 3.76 percent pre-payrolls, but down from six-month highs above 3.9 percent.

The CBOE Volatility Index (.VIX) is down .96 to 29.22 as stocks recover and event risk has passed. The Dow is up 40 points. Approximately 2.9 million puts and 3.9 million calls traded by Noon eastern time, a ratio of .75.

Puts are active in Genco Shipping (GNK) as the dry bulk shippers (DRYS, DSX, EGLE, EXM) show relative weakness. Shares are down .81 to $24.36 and 10,000 Oct 15 puts traded, including a purchase of 9,600 for $1.30.

Bearish trading is also being seen in PharMerica (PMC), the Currency Euro Trust (FXE) and the Market Vectors Coal Fund (KOL). Bullish trading picked up in a number of the metals companies, including Alcoa (AA), AK Steel (AKS), and Cliffs (CLF).