Global stocks rise on strong U.S. jobs report, oil surge

Fri Mar 4, 2016 4:31pm EST
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By Dion Rabouin

NEW YORK (Reuters) - A gauge of stock markets worldwide rose to a two-month high on Friday, posting its largest weekly gain since October, as oil and other commodity prices firmed and strong U.S. jobs growth bolstered confidence in the global economy.

The recovery in commodities lifted emerging markets shares, which rose 1.6 percent on the day. MSCI's emerging-market stock metric .MSCIEF posted its largest one-week gain since December 2011.

U.S. equity indexes rose to their highest levels since early January following the jobs data, which showed strong growth in payrolls and an increase in labor-force participation, though there was a surprising decline in hourly wages.

Nonfarm payrolls grew by 242,000 jobs last month, beating forecasts for 190,000 new jobs, but average hourly wages dipped by 0.1 percent after a strong 0.5 percent increase in January.

The drop in wages suggested that U.S. inflation remained muted, analysts said. Policymakers at the Federal Reserve are watching inflation closely in their assessment of when to continue raising interest rates.

"The wage number might be the silver lining, if you will, against a more hawkish Fed over the next few months because the Fed has been really focused on inflation," said Mohannad Aama, managing director of Beam Capital Management LLC in New York.

A rise in the Fed's rates generally strengthens the dollar, which makes U.S. exports more expensive and can reduce profits for companies that do business overseas.

The Dow Jones industrial average on Friday .DJI rose 62.87 points, or 0.37 percent, to 17,006.77, the S&P 500 .SPX gained 6.59 points, or 0.33 percent, to 1,999.99 and the Nasdaq Composite .IXIC added 9.60 points, or 0.2 percent, to 4,717.02.   Continued...

Pedestrians walk pass an electronic board showing the Japan's Nikkei average (R) and other stock market indices outside a brokerage in Tokyo, Japan, February 29, 2016. REUTERS/Yuya Shino