U.S. stocks rallied for the first time this week, commodities gained and Treasuries declined after American payrolls climbed more than forecast in July. Italian and Spanish debt rebounded.
The Standard & Poor's 500 Index increased 1.5 percent as of 9:42 a.m. in New York. The Stoxx Europe 600 Index added 1.7 percent. Ten-year Treasury yields added six basis points to 1.54 percent, while similar-maturity Italian debt sank 32 basis points to 6 percent. S&P's GSCI Commodity Index gained 1.7 percent, led by oil and wheat. The dollar rose against the yen.
U.S. payrolls climbed in July, boosted by a pickup in employment at automakers, even as the jobless rate unexpectedly rose to a five-month high, Labor Department figures showed. Members of German Chancellor Angela Merkel's coalition parties signaled they won't stand in the way of European Central Bank chief Mario Draghi's plan to buy government bonds.
"We haven't seen an upside surprise in a while and that's what the market reacting to," said Michael Mullaney, who helps manage $9.5 billion as chief investment officer at Fiduciary Trust in Boston. "It's still not strong enough to make a real dent in the overall growth of the economy and it's not weak enough to get the Fed acting."
Payrolls increased 163,000 following a revised 64,000 rise in June that was less than initially reported, according to the Labor Department. The median estimate of 89 economists surveyed by Bloomberg News called for a gain of 100,000. Unemployment rose to 8.3 percent.
The S&P 500 has fallen in the past four days as ECB President Mario Draghi and Fed Chairman Ben S. Bernanke failed to reassure investors on immediate efforts to bolster the economy. LinkedIn Corp., the biggest professional-networking website, surged 15 percent after forecasting sales that beat analyst estimates. Knight Capital Group Inc. advanced 25 percent after tumbling 75 percent in two days on losses from a trading breakdown.
More than 15 shares advanced for every one that declined in Europe's Stoxx 600. Allianz SE, Europe's biggest insurer, added 5.3 percent after second-quarter net income rose 23 percent. Axa SA, the second-largest insurance company, gained 3.9 percent on a smaller-than-estimated drop in profit.
Ten-year yields will climb to 1.84 percent by year-end, according to a Bloomberg survey with the most recent forecasts given the heaviest weightings. The yield has averaged 3.14 percent over the past five years.
The dollar appreciated 0.6 percent to 78.68 yen. The euro rose 0.9 percent to $1.2283.
The cost of insuring European corporate debt pared yesterday's rise, with the Markit iTraxx Crossover Index of credit-default swaps on 50 mostly junk-rated European companies falling 19 basis points to 629. Contracts tied to Spain's sovereign bonds climbed for a fourth day, increasing 12 basis points to 582 basis points.
The yield on the 10-year Spanish bond fell 31 basis points to 6.85 percent, after jumping 43 basis points yesterday. Spanish Prime Minister Mariano Rajoy told reporters today that he hadn't made a decision on whether to request support from the bailout fund known as the European Financial Stability Facility and still needed details on how bond-buying tool would work.
Crude climbed 3 percent to $89.77 a barrel. The U.S. is the biggest oil consumer and second-biggest buyer of copper, after China. Natural gas futures fell 0.7 percent to $2.901 per million British thermal units, after dropping 7.9 percent yesterday because of increased U.S. inventories.
The MSCI Emerging Markets Index added 0.6 percent, reversing earlier declines of as much as 0.7 percent. The measure has gained 0.4 percent this week, its third consecutive increase. The Kospi index fell 1.1 percent as Samsung Electronics Co., South Korea's biggest exporter of consumer electronics, lost 1.6 percent. The Shanghai Composite Index rose 1 percent, the most in five weeks, following a cut in transaction fees on share trading. Russia's Micex Index added 0.8 percent. Benchmark gauges in Turkey, Poland and the Czech Republic rose at least 1 percent.