Shares at new highs on U.S. jobs growth; dollar gains

Thu Jul 3, 2014 2:59pm EDT
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By Herbert Lash

NEW YORK (Reuters) - The dollar rose and global equity markets advanced on Thursday, with stocks setting record highs on a surge in U.S. jobs growth that provided a clear sign the economic growth is faster than expected, perhaps as much as 4 percent in the second quarter.

The Dow industrials passed the 17,000 milestone and the benchmark S&P 500 rose to within 1 percent of piercing 2,000 after the U.S. unemployment rate fell to its lowest level in almost six years. Both indexes set record intraday and closing highs.

MSCI's all-country world index .MIWD00000PUS, which covers about 85 percent of potential global stock investments, rose 0.39 percent, also to a record high.

European shares climbed to within 2 points of multi-year highs.

Jacob Oubina, senior U.S. economist at RBC Capital Markets in New York, called the Labor Department report "extremely bullish."

Nonfarm payrolls increased by 288,000 jobs in June and the unemployment rate fell to 6.1 percent. U.S. employment has grown at more than 200,000 jobs in each of the last five months, the first such string of growth since the late 1990s.

"You'll see the market continue to grind up, but not leap higher," said Phil Orlando, chief equity market strategist at Federated Investors in New York."We're convinced that we'll see 2,100 on the S&P 500 by the end of the year but we're pushing up to 2,000 right now, so you don't have the huge valuation imbalance and that's why you're not going to see a huge jump here," Orlando said.

The pan-European FTSEurofirst 300 index .FTEU3 closed up 0.95 percent at 1,398.24, just shy of the 6-1/2-year high of 1,399.62 reached in late June.   Continued...

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange June 30, 2014. REUTERS/Remote/Thomas Peter