European stocks higher on US jobs report, French election

LONDON: European stocks ended the week higher on Friday after key US jobs data came in better than expected and as investors readied themselves for the final round of the French presidential election at the weekened, traders said.

On the other side of the Atlantic, the solid US jobs report boosted the S&P 500 and Nasdaq indices in New York, but the Dow dipped on news that Warren Buffett had sold shares of IBM.

"Today's employment report should have brushed aside any concerns about the health of the US labour market that may have come up after the disappointing payroll number last month," said UniCredit analyst Harm Bandholz.

The jobs report "corroborates the Fed's and our view that the growth slowdown in the first quarter was transitory," the expert said.

But Oanda analyst Craig Erlam was more cautious, described the jobs data as "mixed."

"The jobs report ... will likely do nothing to either encourage or deter the Fed when it comes to deciding whether to raise interest rates next month," he said.

After a slow March, when hiring likely was held down by a winter storm, the US economic engine added an estimated 211,000 net new positions in April while the jobless rate fell a tenth to 4.4 percent, the lowest since May 2007, the Labor Department reported.

- Possible US rate hikes? -

The data "constituted a supportive factor for the markets today, coming out higher than forecast," said Frederic Tassin, asset manager at Aviva Investors France.

And looking ahead to the French presidential election on Sunday, "at least the probability that Emmanuel Macron will be elected is high, so we've seen an easing of the risk premium since the first round of voting" two weeks ago, the expert said.

French centrist Emmanuel Macron sought to cement his frontrunner status on the last day of campaigning for the weekend's election run-off after a bruising and divisive race.

Pro-European Macron and far-right anti-immigration candidate Marine Le Pen have offered starkly different visions for France during a campaign that has been closely watched around the world.

"Sunday's French election has and will continue to drive investor sentiment throughout Europe, with the prospect of pro-EU Macron pushing for stability rather than the upheaval of Le Pen," said Joshua Mahony, market analyst at IG trading group.

On the corporate front Friday, British publisher Pearson sent its share price rocketing after the group launched a new cost-cutting plan and put its US schoolbooks division up for sale.

In afternoon trade, Pearson shares soared 11.5 percent to 733.5 pence on London's FTSE 100 index, which was up 0.3 percent.

Pearson, which has issued a series of profit warnings in recent years, will seek to slash costs by £300 million ($387 million, 354 million euros) on an annualised basis by the end of 2019.