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Solid US jobs figures boost world markets

A man looks at stock update outside a securities firm in Tokyo Friday, March 9, 2012. Asian stock markets climbed Friday as China's inflation eased and Greece moved closer to inking a deal with private creditors to restructure its debt and avoid a massive default. Japan's Nikkei 225 index jumped 2.3 percent to 9.990.06 after briefly hitting 9,991.41, its highest intraday level since July 27. A man looks at stock update outside a securities firm in Tokyo Friday, March 9, 2012. Asian stock markets climbed Friday as China's inflation eased and Greece moved closer to inking a deal with private creditors to restructure its debt and avoid a massive default. Japan's Nikkei 225 index jumped 2.3 percent to 9.990.06 after briefly hitting 9,991.41, its highest intraday level since July 27. (AP Photo/Junji Kurokawa)
By Sarah DiLorenzo
AP Business Writer / March 9, 2012
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PARIS—News that the U.S. added a significant number of jobs last month pushed stocks higher Friday, but traders remained cautious with Europe's debt crisis still in mind.

Early in the day, Greece announced that it persuaded the vast majority of its private bondholders to take a loss on those investments, wiping about euro100 billion ($130 billion) off Athens' tab.

The deal is historic for Greece and will provide Europe much-needed breathing space in its debt crisis, but market reaction was muted since it was largely expected and Greece still faces potential risks.

"This is just one small step along a very long and difficult road which is still likely to end in a car crash," said analyst Louise Cooper of BGC Partners.

Later Friday, for instance, a decision is expected on whether the bond-swap deal will trigger insurance payments on those bonds. Most analysts expect the insurance, known as credit default swaps, to be paid out.

The ability of banks that invested heavily in Greece to weather a default or major writedown has always been central to Europe's crisis. Although the bond insurance payouts are expected to be relatively small -- about $3.2 billion in total -- the uncertainty over who will take losses and who will be liable to make payments is making some investors cautious.

"The focus then will move on to who the winners and losers are from the CDS and of course, whether 'player X' has written enough CDS protection to take a major loss," said Kit Juckes of Societe Generale.

Amid the uncertainty, the euro fell 1.2 percent $1.3111.

But the news that the U.S. economy added 227,000 jobs in February gave stocks a respite from Greece and a boost in afternoon trading. The number was better than the 200,000 expected, but did not push down the 8.3 unemployment rate since more people have entered the workforce.

After the news, markets moved up.

The CAC-40 in France gained 0.3 percent to end at 3,487, while Germany's DAX rose 0.7 percent to 6,880. The FTSE index of leading British shares closed 0.5 percent higher at 5,887.

Wall Street was also boosted. In afternoon trading, the Dow Jones industrial average gained 0.3 percent to 12,950, while the broader Standard & Poor's index was up 0.6 percent at 1,373.

Investors remain cautious about the economic outlook, with some worried that surging oil prices could dampen a recovery. Benchmark oil for April delivery rose $1.21 Friday to $107.79 in electronic trading on the New York Mercantile Exchange.

Earlier, Asian markets were reassured by news that China's inflation fell sharply in February, giving Beijing more leeway to stimulate the world's No. 2 economy. Consumer price inflation fell to 3.2 percent from January's 4.5 percent.

That helped to offset any caution from the U.S. Labor Department report.

Japan's Nikkei 225 index closed up 1.7 percent to 9,929.74, its highest finish in more than seven months. It briefly surged past 10,000 for the first time since Aug. 1.

Hong Kong's Hang Seng added 0.9 percent to 21,086. South Korea's Kospi rose 0.9 percent to 2,018.30 and Australia's S&P/ASX 200 climbed 1 percent to close at 4,212. Benchmarks in Singapore, Taiwan and Indonesia also rose.

Mainland China's benchmark Shanghai Composite Index gained 0.8 percent to 2,439.46. The Shenzhen Composite Index shot up 1.6 percent to 995.87.

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Pamela Sampson contributed to this report from Bangkok.

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