In This Article:
By Herbert Lash
NEW YORK (Reuters) - The dollar rose and global equity markets jumped on Friday after data showed U.S. job growth increased by the most in 10 months in November, putting to rest recession fears and briefly taking the spotlight off contentious U.S.-China trade talks.
U.S. Treasury yields rose, while gold slipped more than 1%, reflecting a rebound in investor appetite for risk as U.S. unemployment dipped to 3.5%, the lowest in nearly half a century.
Stocks on Wall Street neared record highs, with the benchmark S&P 500 closing within 0.24% of its peak set nine days ago. MSCI's all-country world index, a global benchmark, closed less than 3 points shy of its all-time high of 550.63.
The stronger-than-expected U.S. Labor Department data showed steady wage gains remained near their strongest in a decade, suggesting consumers will continue to drive the longest economic expansion in U.S. history, now in its 11th year.
The improving data would appear to validate the U.S. Federal Reserve's decision in October to signal, after three interest rate cuts this year, that no more are needed for now.
"This certainly contributes to the idea that the U.S. economy is doing better than most folks would give it credit for," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
"This was a very solid report and should put those fears of recession firmly in the rear view," he said.
MSCI's gauge of stocks across the globe gained 0.76%, closing at 548.12. The week ended on a positive note after stocks swung wildly on conflicting remarks regarding progress in U.S.-China trade negotiations.
European equities rallied, with the pan-regional STOXX 600 index rising 1.16%. Most major regional indices closed more than 1% higher.
Shares on Wall Street rose as the jobs report bolstered the consensus view that consumer strength will support the U.S. economy and in turn, equities.
The Dow Jones Industrial Average rose 337.27 points, or 1.22%, to 28,015.06. The S&P 500 gained 28.48 points, or 0.91%, to 3,145.91 and the Nasdaq Composite added 85.83 points, or 1%, to 8,656.53.
The dollar gained after weaker-than-expected U.S. data on manufacturing and the service sector earlier in the week helped drive five straight days of losses.
The dollar index rose 0.29%, with the euro down 0.41% to $1.1056. The Japanese yen strengthened 0.18% versus the greenback at 108.57 per dollar.
Analysts said the jobs report showed underlying U.S. economic strength and offset mixed signals from other recent data.