European and U.S. stock markets shot higher Friday after much better than expected U.S. jobs data fueled optimism about the pace of recovery in the world's largest economy.
In Europe, the FTSE 100 index of leading British shares was up 53.66 points, or 1 percent, at 5,366.66 while Germany's DAX rose 78.64 points, or 1.4 percent, to 5,848.99. The CAC-40 in France was up 78.09 points, or 2 percent, at 3,873.20.
On Wall Street, the Dow Jones industrial average was up 129.01 points, or 1.2 percent, at 10,495.16 soon after the open. The broader Standard & Poor's 500 index rose 18.30 points, or 1.7 percent, to 1,118.22, having hit a 2009 high of 1,118.73.
Trading had been lackluster before the data showed a surprise fall in the U.S. unemployment rate in November to 10 percent from 10.2 percent and that only 11,000 jobs were lost during the month, the lowest for two years. Investors were anticipating an unchanged unemployment rate and a near 150,000 rise in the number of unemployed.
Though technically out of
recession, the U.S. economy has shed jobs at a hefty rate, but Friday's figures indicated that the pace of these losses was not as sharp as estimated — both September and October were revised to show that payrolls were actually 159,000 higher than previously reported.
The monthly jobs figures often affect investor sentiment for a week or two and could help the nine-month bull run continue through to the year-end.
"It does look like we're seeing some stabilization in the U.S. jobs market which is crucial for the U.S. economic recovery and reflects the U.S. recovery," said Neil Mackinnon, global strategist at VTB Capital.
Mackinnon said the jobs news is likely to mean that the U.S.
Federal Reserve will start to withdraw its extraordinary liquidity measures introduced over the last couple of years sooner than previously thought, though he said "we are a long way from a hike in the Fed funds rate."
On Thursday, the European Central Bank announced that it was beginning the process of withdrawing liquidity from the markets but stressed that talk of a rate hike was premature.
The dollar was also in demand after the jobs data as bond yields spiked higher — the euro was down 0.7 percent at $1.4947 while the dollar pushed up 1.4 percent to 89.62 yen.
The strength of the dollar pushed the price of gold down 2 percent to $1,194 an ounce — gold invariably moves in opposite direction to the U.S. currency.
However, oil prices strengthened amid hopes of rebounding U.S. demand. The benchmark crude contract for January deliver jumped $1.19 to $77.65 a barrel.
Earlier in Asia, Hong Kong's Hang Seng closed down 55.72 points, or 0.3 percent, to 22,498.15, but Japan's Nikkei 225 stock average bucked the trend and ended up 44.92 points, or 0.5 percent, to 10,022.59.
Elsewhere in Asia, Australia's market dropped 1.5 percent while Taiwan's market shed 0.4 percent.
However, Shanghai's market gained 1.6 percent and South Korea's Kospi rose 0.6 percent after the government said the economy, Asia's fourth-largest, expanded a revised 3.2 percent in the third quarter. That was a better performance than initially estimated thanks to stronger growth in manufacturing, exports and services.
