Stocks climb on factory, U.S. jobs data; euro jumps, yen slumps

Fri Feb 1, 2013 4:19pm EST
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NEW YORK (Reuters) - Major world stock markets climbed to their highest in nearly two years on Friday, helped by manufacturing and employment data indicating the global economic recovery is on track.

The euro rose to its highest level against the U.S. dollar since mid-November 2011 after data showed euro zone factories had their best month in January in nearly a year. The yen fell to a two-and-a-half-year low against the dollar and a 33-month trough versus the euro, extending its recent weakness on bets the Bank of Japan will ease monetary policy further.

The MSCI world equity index .MIWD00000PUS was up 0.7 percent, helped by surveys indicating Chinese factory output was recovering, while German industrial output posted its best month in nearly a year, though the euro zone as a whole continued to struggle.

U.S. data showed employment grew modestly in January and factory activity touched a nine-month high. Payrolls rose by 157,000 last month and revisions showed 127,000 more jobs created in November and December than previously reported. Separately, the Institute for Supply Management said its index of national factory activity rose to 53.1 last month, its highest since April, from 50.2 in December.

Other data on Friday also suggested that the surprise contraction in U.S. economic activity in the last three months of 2012 was largely a fluke, not a trend.

"Fundamentals are looking good today after the data, but overall, the money that was on the sidelines is finally coming into the market again," said Doug Cote, chief market strategist at ING Investment Management.

The Dow Jones industrial average .DJI closed up 149.21 points, or 1.08 percent, at 14,009.79. The Standard & Poor's 500 Index .SPX was up 15.06 points, or 1.01 percent, at 1,513.17. The Nasdaq Composite Index .IXIC ended up 36.97 points, or 1.18 percent, at 3,179.10.

The Dow industrials rose above 14,000 for the first time since mid-October 2007 and the S&P touched its highest since December of that year. The gains are the fastest start to the year for equities in 16 years.

European shares inched up as investors took advantage of the past two sessions' losses to snap up cheapened equities, reassured by the run of solid data from China, Europe and the United States.   Continued...

Electronic information boards display market information at the London Stock Exchange in the City of London January 2, 2013. REUTERS/Paul Hackett