US jobs growth powers rally, with global stocks riding high
GLOBAL stocks rose to the highest level in more than four-and-a-half years, a day after the Dow Jones Industrial Average jumped to record levels, as a private report showed faster- than-forecast growth in US jobs.
Spain's 10-year bonds also advanced for a sixth day.
The MSCI All-Country World Index increased for a third day, up 0.3pc in New York trading, rising above the highest close since June 2008.
Spanish 10-year borrowing costs dropped three basis points to 5.01pc.
A private US jobs report from ADP Research Institute showed that employers added 198,000 positions last month, topping the median economist forecast for 170,000 and bolstering optimism before the government's monthly labour report on Friday.
"ADP was better than expected. Last month was revised up, and that has positive implications for the jobs number on Friday," said Philip Orlando, chief equity strategist at Federated Investors.
"The market, which has obviously had a great run here, should take this favourably."
The 198,000 increase in employment followed a revised 215,000 gain the prior month that was more than initially estimated, ADP figures showed.
Government data in two days' time are forecast to show private payrolls grew by 167,000 jobs and the unemployment rate held steady at 7.9pc, according to economists' estimates.
US stocks climbed on Tuesday after the Institute for Supply Management's index of non-manufacturing businesses, which covers about 90pc of the US economy, increased to 56 last month from 55.2 in January. Readings above 50 signal expansion.
The rally was also triggered after China's government said it will keep its economic growth target at 7.5pc for this year and plans a 10pc jump in fiscal spending.
The S&P 500 has jumped more than 128pc from its bear- market low. The index trades for 15.2 times reported earnings, compared with a multiple of 17.5 when it reached its record in October 2007.
"The good news is we do not seem to be anywhere close to the kind of cyclical turning point we were on the cusp of in October 2007, suggesting the stock market may have more room to run," said economist Julia Coronado of BNP Paribas.
"However, we do not have anything like the kind of robust growth dynamic that had led us to a cyclical peak."