European stocks rally following US jobs report

European stocks rallied from lows on Friday after a stronger than anticipated increase in earnings in a flagship US jobs report made up for a weaker-than-forecast payrolls figure.

The benchmark STOXX 600 index posted its best weekly performance since the middle of December as it turned higher following the US report.

In Ireland, the Iseq Overall Index closed down 0.35 per cent at 6,594.32 on what traders described as a quiet day of trading.

Dublin

Many of the Iseq's heavyweight stocks closed the day down on light volumes. Kerry and Kingspan both finished 1.2 per cent lower, while Ryanair was down 0.9 per cent, Paddy Power Betfair was off 0.6 per cent, and CRH dropped 0.3 per cent.

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Among the main gainers was drinks group C&C, which finished up 1.5 per cent. It was a good day for the property Reits, with Green closing up by 0.9 per cent while Hibernia finished 0.8 per cent higher. Insurer FBD was up 0.9 per cent at the close with Bank of Ireland closing 0.4 per cent higher.

London

The UK’s top share index posted a record high close, rounding off its fifth straight week of gains. The FTSE 100 index was up 14.74 points or 0.2 per cent at 7,210.05 points, the index’s first-ever close above 7,200.

US employment increased less than expected in December, but a rebound in wages pointed to sustained labour market momentum that sets up the economy for stronger growth and further rate increases by the Federal Reserve this year .

Defence company BAE Systems rose the most, gaining 3 per cent for its biggest advance since a two-day rally after the US presidential election, when the surprise victory of Donald Trump sent defence stocks soaring.

Shares in Lloyds rose 2 per cent after broker Barclays raised its rating on the stock to "overweight" from "equal-weight" and increased its target price, citing an expected rise in net interest margin for the bank.

In all, financials contributed 14 points to the FTSE 100‘s rise, with the sector seen as benefitting from returning growth and inflation in the global economy.

Europe

US employment increased less than expected in December but a rebound in wages pointed to sustained labour market momentum that sets up the economy for stronger growth and further interest rate increases from the Federal Reserve this year.

The STOXX 600, which had been down 0.4 percent ahead of the data, closed down just 0.1 percent but still finished the week up 1.1 per cent.

Precious metals miners Fresnillo and Randgold Resources fell 3.5 per cent and 2.8 per cent respectively after gold slipped from one-month peaks, hindered by dollar strength.

Shares in Fiat Chrysler Automobiles gained 7 per cent, the biggest riser in the STOXX 600 index, after Goldman Sachs added the stock to its "Conviction List" and raised its target price to €16.50.

New York

The Dow Jones came within a hair’s breadth of hitting 20,000 for the first time ever as Wall Street staged a swift recovery, helped by technology stocks.

Apple’s shares rose 1.1 per cent to $117.86 after Canada’s Competition Bureau said it did not find sufficient evidence that the iPhone maker had engaged in anti-competitive conduct, closing a two-year investigation.

The Nasdaq was on track to be the biggest gainer in Wall Street’s first trading week of the year, rising about 2.6 per cent. The S&P was set to gain 1.8 per cent and the Dow 1.1 per cent.

The first record high of the year for the S&P 500 followed a US Department of Labor report that showed the economy added fewer-than-expected jobs last month but wages increased, suggesting resilience in the labour market.

At 12:36pm, the Dow Jones industrial average was up 97.41 points, or 0.49 per cent, at 19,996.7. The index rose to as much as 19,999.63. The S&P 500 was up 12.55 points, or 0.55 per cent, at 2,281.55. The Nasdaq Composite index was up 44.27 points, or 0.81 per cent, at 5,532.21, easing slightly from an all-time high of 5,526.38.

(Additional reporting by Reuters)