Global Market Report 6 February 2012

Stocks rose after the US economy added more jobs than expected last month, driving the Nasdaq Composite to an 11-year high and pushing the Dow to its highest close in nearly four years.

The Dow Jones Industrial Average advanced 156.82 points, or 1.2%, to 12,862.23, ending the week with its best finish since May 19, 2008. The Standard & Poor's 500-stock index tacked on 19.36 points, or 1.5%, to 1,344.90, capping off a fifth-straight weekly gain.

The technology-oriented Nasdaq Composite Index gained 45.98 points, or 1.6%, to 2,905.66, closing at its highest level since December 2000.

All three major indexes are considered officially in a bull market as of Friday's market action, defined as 20% or higher above October's closing lows. The S&P 500, up 6.9% so far this year, and the Nasdaq, up 12%, are each off to their best starts to a year in more than two decades.

All 10 of the S&P 500's sectors rose on Friday, with financials and consumer-discretionary stocks leading the way. Bank of America rose 39 cents, or 5.2%, to $7.84, while Caterpillar added $3.61, or 3.3%, to $113.94.

For Australian ADRs listed on the NYSE, BHP Billiton firmed $1.25 (1.55%) to $82.15, ResMed advanced 42 cents (1.44%) to $29.60, Telstra Corporation improved 10 cents (0.56%) to $18.10, Telecom Corporation of NZ climbed 3 cents (0.33%) to $9.08 and Westpac increased $1.90 (1.69%) to $114.48.

Friday's gains followed a strong report from the US Labor Department. January data showed non-farm payrolls rose 243,000 last month, marking the biggest gain since April. The jobless rate fell from 8.5% to 8.3%, the lowest it has been since February 2009.

Other data showed that the US non-manufacturing sector expanded at a faster rate in January, while a factory orders came in lower than expectations.

The surprisingly strong jobs report boosted the US dollar, as evidence of a rebounding labour market helped diminish expectations of more expansionary monetary policy by the Federal Reserve.

The US economic releases also drove investors out of safe-harbour Treasury bonds, fuelling the biggest one-day sell-off for the benchmark 10-year note since late October.

European stock markets rallied after the much-better-than-expected US jobs data supported the view that the economic recovery remains on track. The Stoxx Europe 600 index rose 1.7% to end at 264.60. For the week, it gained 3.6%.

Markets also gained from the euro-zone composite purchasing manager's index confirming growth in private-sector activity in January. The index rose to 50.4 in January from 48.3 in December, confirming an earlier preliminary estimate. A reading above 50 indicates growth in activity.

Among the biggest movers, shares of Temenos Group AG surged nearly 16% after UK software group Misys PLC confirmed the two companies are in preliminary talks regarding a potential merger. Misys gained 1.2%.

The German DAX 30 index rose 1.7% to 6,766.67. Shares of auto maker and index heavyweight Daimler AG rallied 3.1% after it said global sales of its Mercedes-Benz car brand rose 5.8% in January, helped by strong US sales and gains in Japan. Shares of rival BMW AG rose 2.9%.

Bucking the positive trend in Europe, the Greece ASE Composite index fell 3.8% to 762.15, with National Bank of Greece SA dropping 9.3%.

Media reports said Greek Prime Minister Lucas Papademos may resign if a new financing plan isn't backed by the three parties that support his interim unity government. He is expected to meet with the leaders of those parties on Saturday, as he also tries to wrap up talks with private creditors to write down debt.

The UK's FTSE 100 index jumped 1.8% to 5,901.07. Outperforming the British index, insurance firm Admiral Group PLC surged 7.9% after announcing an extension of its existing UK car-insurance reinsurance partnerships into 2014.

UK telecommunications firm BT Group PLC rose 3.9% after posting a 41% jump in third-quarter profit, helped by cost cutting, lower finance expenses and new contracts. The company also said it will meet some of its earnings targets a year earlier than expected.

Rio Tinto rose 7.50 pence (0.19%) to 3,910.67 pence and BHP Billiton firmed 11.50 pence (0.52%) to 2,165.47 pence.

European bank shares posted strong gains. HSBC Holdings PLC rose 2.5% and Lloyds Banking Group PLC rallied 5.1% in London.

Asian stock markets ended in mixed territory, with Japanese and South Korean shares losing ground, as investors digested a raft of earnings reports and turned cautious ahead of a key US employment report.

Chinese stocks managed to finish higher after a lower opening, with the property sector and some other laggards finding buyers ahead of the weekend.

Japan's Nikkei Stock Average fell 0.5% to 8,831.93 and South Korea's Kospi gave up 0.6% to 1,972.34.

China's Shanghai Composite gained 0.8% to 2,330.41, Hong Kong's Hang Seng Index rose 0.1% to 20,756.98 and Taiwan's Taiex advanced 0.3% to 7,674.99.

Base metals closed sharply higher on the London Metal Exchange, buoyed by the better-than-expected US jobs data, although trade players warned that gains may not be sustained if currency pressures and issues in the euro zone come back into focus next week.

Oil rose sharply after the US government said unemployment fell last month, boosting expectations that demand from the world's biggest oil consumer will improve.

Gold fell as upbeat US economic data sapped hopes of further fiscal stimulus and as some investors moved to cash in recent gains.