* Risk assets climb on better-than-expected labor report
* Labor report suggests U.S. on the brink of creating jobs
* Bond prices fall as jobs data erodes safe-haven appeal
* Oil hits seven-week high above $82 on U.S. jobs report
(Updates with close of European markets)
By Herbert Lash
NEW YORK, March 5 (Reuters) - World equities and oil prices
jumped on Friday after fears that a stormy February would
darken the U.S. jobs picture proved false, bolstering sentiment
about economic recovery and the pivotal labor market.
Sentiment also was buoyed after European leaders expressed
confidence that new austerity measures planned by Greece would
be enough to pull the country out of its debt crisis and make
any bailout unnecessary. For details see: []
Government debt prices on both sides of the Atlantic slid
on news that U.S. non-farm payrolls fell a less-than-expected
36,000 last month, indicating heavy snowstorms across much of
the United States last month did not hobble employment.
Analysts had been concerned the severe weather would cause
a drop of 50,000 or more in U.S. payrolls.
"Traders and investors are assuming there was a pretty
good-sized weather effect restraining the number and if we only
had 36,000 jobs down in February, that it could have been a
positive number were it not for the bad weather," said Michael
Moran, chief economist at Daiwa Securities America in New
York.
The appetite for risky assets rose, with European shares
notching their largest one-day gain in three months to hit
six-week highs. The tech-rich Nasdaq stock market was poised to
post its biggest weekly gain since October.
"It was a risk appetite event," said Michael Woolfolk,
senior currency strategist at BNY Mellon in New York. "The fact
that the U.S. labor market is in better shape than we were
thinking supports the U.S. recovery story and it encourages
market participants to put on risky trades."
The MSCI world equity index <.MIWD00000PUS> gained 1.1
percent and the FTSEurofirst 300 <> index of top European
shares advanced for a sixth straight session to close up 1.8
percent at 1,054.55 points. It was the index's biggest weekly
advance in nearly eight months.
Banks were the top gainers in Europe, with the STOXX Europe
600 banking index <.SX7P>rising 3.1 percent, its biggest
one-day gain in four months.
In the United States, diversified manufacturer 3M Co
<MMM.N> gained 1.4 percent after the Labor Department report
showed the manufacturing sector added 1,000 jobs in February.
[]
Shortly after midday, the Dow Jones industrial average
<> was up 83.82 points, or 0.80 percent, at 10,527.96. The
Standard & Poor's 500 Index <.SPX> was up 11.03 points, or 0.98
percent, at 1,134.00. The Nasdaq Composite Index <> was up
25.62 points, or 1.12 percent, at 2,317.93.
Oil rose to a seven-week high above $82 a barrel, copper
rose 3 percent and gold edged toward $1,140 an ounce after the
dollar weakened against the euro.
The Japanese currency also dropped versus the euro and
higher-yielding currencies such as the Australian and New
Zealand dollars as the data encouraged investors to buy risky
assets funded by cheaply borrowed yen. []
The euro <EUR=> was up 0.15 percent at $1.3599 and against
the yen, the dollar <JPY=> was up 1.53 percent at 90.43.
The dollar was flat against a basket of major currencies,
with the U.S. Dollar Index <.DXY> at 80.558.
In Europe, Greek government debt outperformed Bunds after
Greece's 5 billion euro bond issue on Thursday was snapped up
by investors. []
The Bund future <FGBLc1> was down 20 ticks at 124.09 in
after hours trading.
The VDAX-NEW volatility index <.V1XI>, a gauge of investor
sentiment in Europe, hit its lowest level in nearly two years.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 22/32 in price to yield 3.69 percent.
U.S. light sweet crude oil <CLc1> rose $1.35 percent to
$81.56 a barrel, after earlier hitting $82.07.
Spot gold prices <XAU=> rose $3.40 to $1,135.00 an ounce.
(Reporting by Ryan Vlastelica, Chris Reese, Wanfeng Zhou in
New York; George Matlock, David Sheppard, Alex Lawler and Jan
Harvey in London; writing by Herbert Lash; Editing by Leslie
Adler)
