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Published on: Monday, July 11, 2016

The benchmark S&P 500 stock index has brushed against its record closing high as Wall Street rallied after a much-larger-than-expected jump in jobs growth confirmed the US economy has regained speed after a first-quarter lull.

The S&P briefly on Friday traded above its record close but ended less than a point below it and was three points away from the all-time intraday high of 2,134.72 reached in May 2015.

After May's dismal payrolls report raised concerns about the health of the economy, US employers added 287,000 jobs in June, beating market expectations for the first time in four months.

"The equity market is telling you the second quarter economy looks better than the first quarter," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

He said if the upcoming earnings season provides investors with a strong outlook, the S&P will likely break the record and has a chance at rallying from there.

"The old high has been resistance and if you break it and see earnings growth and relatively good guidance, people will probably try to get in front of that," said Hogan.

Some analysts said the strong jobs number could put a Federal Reserve interest rate rise back on the table, even as concerns linger over the global economic impact from Britain's vote last month to leave the European Union.

The Dow Jones industrial average closed 250.86 points, or 1.4 per cent, higher at 18,146.74; the S&P 500 gained 32 points, or 1.53 per cent, to 2,129.9 and the Nasdaq Composite added 79.95 points, or 1.64 per cent, to 4,956.76.

The S&P hit a session high of 2,131.71, briefly trading above its record closing high of 2,130.82 set in May 2015.

LONDON - European shares rose, ending a week of losses on a positive note with Milan outperforming thanks to a rally in its battered baking stocks.

Equities got a boost late in the session from the stronger-than-expected US jobs report, indicating the US economy was improving and a Federal Reserve interest rate rise could still be on the horizon this year.

The pan-European STOXX Europe 600 rose 1.6 per cent but still ended the week with a loss of 1.5 per cent due to persistent worries over the economic and political fall-out of Britain's vote on June 23 to leave the European Union.

"The concerns of the Brexit are reflected quite well in share prices so the question is how much pain (there) will be before a relief. It's probably still a little bit away," Gerhard Schwarz, head of equity strategy at Baader Bank in Munich, said.

"It will also depend on a rebound in banks as the systemic risk due to Brexit is certainly a concern and credit risks coming from Italy are weighing on the sector," he said.

Milan's blue chip index outperformed the region to gain 4.1 per cent with banks Intesa Sanpaolo Banco Popolare and UniCredit posting gains of between 8.7 and 18.4 per cent.

Germany's auto-heavy DAX index rose 2.2 per cent, or 210.88 points, to 9,629.66.

London's FTSE 100 rose 0.87 per cent, or 56.85 points, to 6,590.64.

HONG KONG - Stocks struggled for direction ahead of the latest US unemployment report.

The US jobs data are expected to show solid job creation in June, but worries over the world economy following Britain's vote to leave the European Union and a deepening crisis in Italian banks continue to sour investor sentiment globally.

The first measure of UK consumer confidence since the Brexit referendum two weeks ago showed the steepest decline in morale in more than five years, according to research company GfK on Friday.

Asian shares ex-Japan lost 0.4 per cent. Japan's Nikkei fell 1.11 per cent, or 169.26 points, to 15,106.98, as the yen strengthened.

The blue-chip Hang Seng Index fell 0.69 per cent, or 142.75 points, to 20,564.17 points, while the Shanghai Composite Index fell 0.95 per cent, or 28.75 points, to 2,988.09 in their biggest intraday of percentage drop since June 24.

"If we see another weak (US jobs) print, then the risk-off mood that prevailed at the start of the week is likely to return with a vengeance," Rabobank analysts said in a note to clients on Friday.

"Indeed, an 'impossible and ridiculous' call such as 1.00 per cent 10-year US Treasuries would start to look all too possible and extremely plausible. In short, a trapdoor is likely to open underneath bond yields, taking us ever-deeper into ultra-low/negative territory on a global basis," they said.

WELLINGTON - The S&P/NZX 50 Index fell 7.42 points, or 0.1 per cent, to 7000.1.

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