European stocks up on US jobs report

[July 03, 2010]  LONDON (AP) -- European markets rose Friday after a U.S. jobs report showed private-sector hiring in the world's largest economy continued growing in June, although not as fast as expected or hoped.

The Labor Department said private employers added 83,000 jobs last month, less than the 112,000 economists had forecast. Because U.S. consumer spending accounts for a fifth of global economic activity, the payrolls data is crucial to gauge the outlook of the global economic recovery.

The FTSE 100 index of leading British shares was up 1.2 percent at 4,865.38. Germany's DAX was up 0.6 percent to 5,894.01, while France's CAC-40 was 1.2 percent higher at 3,378.88.

Wall Street edged up on the open -- the Dow Jones industrial average was up 0.1 percent at 9,744.15 and the Standard & Poor's 500 index was 0.1 percent higher at 1,028.69.

""Given the weaker tone of the recent economic news, this report could have been much worse," said Paul Dales, economist at Capital Economics, referring to a string of weak U.S. statistics on housing, consumer confidence and manufacturing activity that have shaken investors confidence in the economic recovery.

"While an outright double-dip recession remains unlikely, growth will slow later this year and into 2011, perhaps more markedly than we have been forecasting all along," said Dales.

European indexes had been boosted earlier in the day by a rally in mining stocks after the Australian government retreated from a planned 40 percent tax on miners' biggest profits. It opted instead for a softer resource rent tax of 30 percent.

Mining-related shares advanced -- BHP Billiton Ltd. rose 2.7 percent, Rio Tinto Ltd. and Antofagasta were up 2.4 percent, and Anglo-American gained 2.5 percent.

Also helping European markets was a report from Spain -- one of the most vulnerable in the eurozone debt crisis -- showing unemployment benefits fell by nearly 84,000 in June, the biggest drop for the month since 1997, as companies stepped up hiring for the summer tourism season.

Across the broader eurozone, however, the number of jobless rose by 35,000, according to a separate report. The unemployment rate was stable at 10 percent.

The euro rose to $1.2592, up sharply from $1.2480 Thursday evening in New York.

In Asia, Japan's Nikkei 225 stock average gained 01. percent to 9,203.71 after heavy selling this week. The index closed at a seven-month low on Thursday.

South Korea's Kospi fell 0.9 percent to 1,671.82 while Hong Kong's Hang Seng dropped 1.1 percent to 19,905.32. The Shanghai Composite Index gained 0.4 percent at 2,382.90.

Analysts are concerned recent disappointing manufacturing surveys from some Asia countries point to an economic slowdown in the second half.

"Asia's lead indicators have turned the wrong way," HSBC said in a report. "Still, this is not a double dip: it's only that restocking (of inventories) is fading and the fiscal stimulus is wearing off."

In currencies, the dollar rose to 87.82 yen from 87.72 yen late Thursday.

Benchmark crude for August delivery was down 9 cents at $72.86 a barrel in electronic trading on the New York Mercantile Exchange.

[Associated Press; By CARLO PIOVANO]

AP writers Colleen Barry in Rome and Alex Kennedy in Singapore contributed to this report.

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