Stocks, oil rally on US job gains, Europe hope

NEW YORK: U.S. stocks rose 2 percent, Brent oil prices climbed 3 percent and the euro surged yesterday on news US employers increased hiring in July by the most in five months and optimism that Europe was closer to action on its debt crisis.
Investors took a second look at Thursday's statement by European Central Bank President Mario Draghi and concluded that help was on the way even though it would take more time than many hoped.
"A lot of market participants began to rethink yesterday's ECB statement and look at it from a more positive perspective. Overall, a lot of investors thought, 'maybe it's not as bad as it originally sounded,'" said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
The US jobs report showed stronger-than-expected hiring but also a rise in the unemployment rate to 8.3 percent, which keeps alive the hope of further support for the economy from the Federal Reserve.
The jobs data came at the end of a volatile week, packed with Fed and ECB policy meetings that disappointed those hoping for more aid for the US economy and Europe's debt-stricken nations.
The euro rose as high as $1.2386 on Reuters data and was last up 1.7 percent at $1.2385, on track for its best day since the end of June. The dollar gained 0.5 percent against the yen, to 78.58 yen, after hitting a two-week high of 78.77. The MSCI world equity index was last up 2.0 percent, while European shares gained 2.5 percent.
On Wall Street, the Dow Jones Industrial Average was up 250.02 points, or 1.94 percent, at 13,128.90. The Standard & Poor's 500 Index was up 28.45 points, or 2.08 percent, at 1,393.45. The Nasdaq Composite Index was up 63.21 points, or 2.17 percent, at 2,972.98.
In the oil market, September Brent crude shot up to a session high of $109.13, gaining $3.23, or 3.05 percent, while NYMEX crude for September delivery hit a session high of $91.15 a barrel, up $4.02, or 4.61 percent. Gold also climbed, with spot gold up 0.8 percent at $1,602.30 an ounce. US Treasury prices weakened on the labor data.
Meanwhile, Spanish Prime Minister Mariano Rajoy inched closer yesterday to asking for an EU bailout for his country, but said he needed first to know what conditions would be attached and what form the rescue would take.
His comments, at his first post-cabinet meeting news conference since taking office last December, came a day after the European Central Bank signaled it was preparing to buy Spanish and Italian bonds but only after EU bailout funds were triggered and countries had asked for help.
A source said separately that Spain would not decide whether to apply for several weeks.
Rajoy said he was ready to do what is best for Spain, going far further than he did on Thursday when, during a press appearance with Italian Prime Minister Mario Monti, Rajoy three times declined to say whether he would seek the aid.
"I will do, as I always do, what I believe to be in the best interest of the Spanish people," Rajoy said yesterday.