European Stocks Advance as U.S. Adds More Jobs Than Estimated

By Julie Cruz - Oct 7, 2011 7:39 PM GMT+0700
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A stockbroker speaks on the telephone as he watches his computer screens at Shore Capital Group Ltd. in London. Photographer: Simon Dawson/Bloomberg

European stocks gained for a third day as a report showed the U.S. economy added more jobs than economists had estimated. Asian shares and U.S. index futures advanced.

Saipem SpA (SPM) rose 2.7 percent after JPMorgan Chase & Co. recommended buying the shares of the oilfield-services contractor. Vallourec SA (VK) sank 2.5 percent after lowering its forecast for second-half gross operating profit.

The Stoxx Europe 600 Index climbed 1.5 percent to 233.77 at 1:37 p.m. in London. The benchmark measure is headed for a weekly rally of 3.4 percent amid speculation policy makers will agree to shield banks from the crisis and as the Bank of England expanded its bond-purchase program. The gauge has still retreated 20 percent since this year’s high on Feb. 17 and is trading at about 9.8 times its companies’ estimated earnings, near the lowest since March 2009.

The MSCI Asia Pacific Index jumped 2.1 percent, while Standard & Poor’s 500 Index futures advanced 1.1 percent.

European stocks gained as a U.S. report today showed employers added more payrolls than forecast in September, job gains were revised up in the previous two months and hours and earnings increased, helping ease concerns the U.S. labor market is deteriorating.

Payrolls climbed by 103,000 workers after a revised 57,000 increase in August that was more than originally estimated, Labor Department data showed. The median forecast in a Bloomberg News survey called for an increase of 60,000. The gain reflected the return to work of 45,000 telecommunications employees. The jobless rate held at 9.1 percent.

The European Central Bank said yesterday it will reintroduce yearlong loans, giving banks access to unlimited cash through January 2013. The central bank will also resume purchases of covered bonds to encourage lending. At the same time, the European Commission is pushing for a coordinated capital injection into banks and German Chancellor Angela Merkel said policy makers “shouldn’t hesitate” if it turns out financial institutions are undercapitalized.

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer in London at arummer@bloomberg.net;