US stocks rise on jobs report, Europe hopes

NEW YORK: US stocks were up in mid-afternoon trading on Friday, as a better-than-expected US jobs report and hints of progress in Europe's debt crisis bolstered a volatile day in the markets.

The Dow Jones Industrial Average rose 134.04 points (1.2 percent) to stand at 11,517.72 at 1800 GMT.

The broader S&P 500 was up 11.58 points (1.0 percent) to 1,211.58, while the tech-heavy Nasdaq Composite rose 5.73 points (0.2 percent) to 2,563.12.

Stocks experienced wild swings after the US Labor Department reported that the country's economy generated 117,000 jobs in July, an improvement that cut the official US unemployment rate down a notch to 9.1 percent.

Economists had forecast only a net 84,000 jobs generated.

"The employment report turned out better than expected and certainly better than feared," said Patrick O'Hare, an analyst with Briefing.com.

However, he also cautioned: "The fact remains that the pace of job growth is still not sufficient enough to produce a meaningful change in the unemployment rate."

The market was also buoyed by rumors that the European Central Bank was buying Spanish and Italian government bonds, which have been pummeled in recent days as investors fret about the solvency of the two countries.

Still, Europe's major stock exchanges fell into the red. Both London and Frankfurt closed the day with losses of more than 2.7 percent.

US financial stocks were battered by fears of contagion from Europe's debt crisis and the possibility of an economic slowdown in the United States.

Citigroup, the global financial-services giant, slumped 3.4 percent, while Bank of America dived 4.5 percent.

Industrial giant Caterpillar, an economic bellwether, was up 1.6 percent.

Kraft Foods rallied 3.5 percent. The US food giant announced plans on Thursday to split itself into two companies, a move that was welcomed by many analysts and investors.

Investors were closely watching the US jobs report for signs of whether the world's largest economy might be slipping back into recession, especially after a dramatic sell-off hammered global markets on Thursday.

The Dow fell more than 500 points on Thursday, in its sharpest one-day drop since the 2008 financial crisis.

Bond prices were little changed on Friday after surging in recent days. The yield on the 10-year Treasury slipped to 2.45 percent from 2.46 percent late Thursday, while that on the 30-year bond climbed to 3.73 percent from 3.72 percent. Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011