Markets across Europe and Asia made decent gains Friday, bringing to an end what has been a historic week that was capped with the release of forecast-busting U.S. payrolls figures for February.
However, with many stock indexes trading at multi-year highs and the Dow having notched up another record, it's perhaps not much of a surprise that the frenzied buying seen earlier on in the week has eased. With investors booking some profits ahead of the weekend, stocks have given up a large chunk of their earlier gains.
Nevertheless, the payrolls figures reported by the Labor Department have the potential to shore up markets over the coming days and weeks.
The figures provided further evidence that the U.S. economy, the world's largest, is in relatively rude health. It generated 236,000 jobs during February, way ahead of expectations for a gain of about 170,000. Some of the increase was offset by a downward revision to January's figure to 119,000 from an initially estimated 157,000.
The fall in the unemployment rate, to 7.7 percent in February from 7.9 percent the previous month, also confirmed that the U.S. labor market is on the right track and reinforced the upbeat mood surrounding the U.S. economy. February's unemployment rate was the lowest since December 2009.
In the first hour or two after the figures were released, stocks gained further ground before shedding some of those gains.
In Europe, the FTSE 100 index of leading British shares closed up 0.7 percent at 6,483 while the CAC-40 in France rose 1.2 percent to 3,827. Germany's DAX was 0.6 percent higher at 7,986, having earlier made its first foray above 8,000 since the start of 2008.
In the U.S., the Dow Jones industrial average briefly broke above 14,400 for the first time ever before settling back to trade 0.36 percent higher at 14,380. The broader S&P 500 index rose 0.26 percent to 1,548.
The payrolls figures gave the dollar a further lift as investors speculated over whether the run of positive U.S. economic news may prompt the Federal Reserve to bring an end to its super-loose monetary policy sooner than previously thought. Looser monetary policy tends to weaken a currency.
Such expectations were also evident in the rise in the U.S. Treasury yields in the wake of the figures. The yield on the country's benchmark 10-year bond was up 0.06 percentage points at 2.06 percent.
"With the decline in the headline rate of unemployment to its lowest in five years one has to ask whether this report is one small step for employees and one giant leap for the Fed," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.
The euro was 1.06 percent lower at $1.2962 while the dollar rose 1.26 percent higher against the Japanese yen, at 95.56 — earlier it had gone above 96 yen for the first time since the summer of 2009.
While the dollar has been in demand of late amid optimism over the U.S. economy, the yen has also been on the retreat over the past few months amid expectations of a change in Japan's economic policy that will likely involve the Bank of Japan printing more money.
A lower yen has the potential to make Japanese exports cheaper and that's been at the heart of the Nikkei's recent surge. Earlier, the index jumped 2.6 percent to 12,283.62, its highest close since September 2008.
Elsewhere in Asia, Hong Kong's Hang Seng rose 1.4 percent to 23,091.95 while Australia's S&P/ASX 200 rose 0.3 percent to 5,123.40. Those in mainland China and Singapore fell.
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