Wall Street Jumps, Dollar Gains After US Jobs Report

New York: Stocks on Wall Street rallied on Friday after strong jobs data made it almost certain the Federal Reserve would raise interest rates in two weeks, while a surprise move by major oil exporters to keep pumping near-record output pushed crude prices down.

The dollar rose, gold climbed about 2 per cent and base metals, including copper, gained after the US jobs report for November paved the way for the Fed to raise rates for the first time in nearly a decade at a two-day meeting that ends December 16.

The US economy created 211,000 jobs in November, the US Labor Department said. September and October data was revised to show 35,000 more jobs than previously reported.

"The numbers did not disappoint. We cleared the last hurdle for a rate increase," said Chris Gaffney, president of EverBank World Markets in St Louis.

US stocks jumped more than 2 per cent, with the Dow industrials and the S&P 500 posting their biggest gains in three months. All 10 major S&P 500 sectors climbed except the energy index, which fell after the Organization of the Petroleum Exporting Countries (OPEC) failed to cap near-record output.

Stocks rallied in a sign investors are taking their cue from economic performance instead of central bank monetary policy.

"We're going to see the market focussed on what the US economy is doing, rather than Fed policy," said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Massachusetts.

MSCI's all-country world stock index gained 0.8 per cent.

The Dow Jones industrial average closed up 369.96 points, or 2.12 per cent, to 17,847.63. The S&P 500 gained 42.07 points, or 2.05 per cent, to 2,091.69 and the Nasdaq Composite added 104.74 points, or 2.08 per cent, to 5,142.27.

Less-than-expected tweaks to the European Central Bank's stimulus package on Thursday sent markets into a tailspin but will make it easier for the Fed to raise rates, said Omar Aguilar, chief investment officer of equities at Charles Schwab Investment Management.

The euro, which gained 3 per cent on Thursday, will ease the impact of a strong dollar on US corporate earnings, and should help bolster equity markets, he said.

"I can see from now until the end of the year moderate gains, growing into a nice steady pace," Mr Aguilar said.

Oil shares drop

European shares ended lower, with oil stocks falling almost 2 per cent on the news from the OPEC meeting in Vienna.

The pan-European FTSEurofirst 300 index fell 0.34 per cent to its lowest level in almost three weeks.

Brent crude oil futures settled down 84 cents to $43.00 a barrel. US crude futures dropped $1.11 to settle at $39.97 a barrel, just below the key price level of $40 that has been a major battleground for traders.

Spot gold rose as much as 2.5 per cent to its highest in almost three weeks at $1,088.70 an ounce, and was trading at $1,086.15.

The dollar was last up 0.57 percent at 123.16 yen, while the euro slid 0.62 per cent against the dollar to $1.0870. The dollar index, which measures the greenback against a basket of six major rivals, was last up 0.73 per cent at 98.337.

The gap between 10-year US and German bond yields narrowed to its tightest in more than a month on Friday as investors bet that a divergence in monetary policy between the Fed and the ECB may be less stark than previously thought.

The euro on Thursday made its biggest one-day move in more than six years in a dramatic reversal of its recent rally after ECB President Mario Draghi surprised investors with less monetary stimulus than markets expected.

Benchmark 10-year Treasury notes were last up 15/32 in price to yield 2.2746 per cent.

Yields on German 10-year yields climbed 6 basis points on Friday, rising above 0.70 per cent for the first time in two-and-a-half-months.