GLOBAL MARKETS-Shares extend gains after U.S. jobs report, bonds rise

Fri Jun 6, 2014 12:05pm EDT

* About 217,000 U.S. jobs created in May
    * European markets buoyed by ECB's action on Thursday
    * Yields on low-rated euro zone bonds hit record lows

 (Adds close of European markets)
    By Herbert Lash
    NEW YORK, June 6 (Reuters) - Global equity markets rose and
bond yields fell on Friday after a solid U.S. jobs report added
to evidence of a recovering economy and strengthened a market
already lifted by the European Central Bank's pledge to douse
potential deflation with bundles of cash.
    The Dow and S&P 500 extended a rally that has taken them to
repeated records since last week, while in Europe peripheral
markets outperformed as investors bet that banks in the euro
zone would benefit the most from the ECB's measures.
    The nonfarm payrolls report showed U.S. employers maintained
a solid pace of hiring in May, returning employment to its
pre-crisis level. The economy has recouped the 8.7 million jobs
lost during the recession, adding just under 217,000 jobs in
May, while the unemployment rate held steady at 6.3 percent.
    "This number is not a surprise and should be a rallying cry
for the bulls," said Todd Schoenberger, managing partner at
Landcolt Capital in New York. "There's no shock on either side
of the tape, but it supports the historical norm of the second
quarter typically being the best of the year."
    MSCI's all-country stock index rose 0.53
percent. The FTSEurofirst 300 index of top European
shares gained the same, closing at a preliminary 1,387.54
points. 
    The Dow Jones industrial average rose 67.35 points,
or 0.4 percent, to 16,903.46. The S&P 500 gained 7.78
points, or 0.4 percent, to 1,948.24, and the Nasdaq Composite
 added 22.263 points, or 0.52 percent, to 4,318.49.
    U.S. Treasuries prices gained and German bund futures
 hit session highs of 145.99 after the U.S. jobs data,
up 98 ticks on the day. 
    Benchmark 10-year Treasuries were last up 1/32
in price to yield 2.5806 percent.
    Investors trimmed U.S. dollar holdings after the jobs report
nearly matched consensus and left few chances the U.S. Federal
Reserve will deviate from its course of removing monetary
accommodation from a strengthening economy.
    The euro gyrated after the data, initially selling
off but then rising briefly to a two-week high of $1.3677. It
settled back to $1.3637, down 0.15 percent.
    Brent fell 26 cents to $108.53 a barrel. U.S. crude
 was at $102.40 a barrel, down 8 cents.
    Markets were buoyed after the ECB on Thursday cut interest
rates, including taking deposit rates for banks below zero, and
pledged hundreds of billions more euros of cheap funds for
banks. 
    The ECB refrained from following the U.S., Japanese and
British central banks in pursuing outright bond-buying. But its
president, Mario Draghi, did not rule such bond purchases in the
future, saying, "We aren't finished here." 

 (Reporting by Herbert Lash; Editing by Meredith Mazzilli and
Leslie Adler)
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