Market update: Up, up, up they go; stocks rise as confidence grows for US and China economic recovery

Data showing that the American economic recovery remains on track helped Wall Street shares rise to five-year highs on Friday. The Dow Jones index closed above 14,000 for the first time since 2007 (+1.1%), while the S&P 500 gained 1.0%. Non-farm payrolls were slightly below expectations, with 157,000 jobs added in January, but elsewhere the manufacturing sector gathered pace, rising to the highest level in nine months, while consumer sentiment rose more than expected.

Overnight, Asian markets were buoyed by the US reports as well as encouraging data out in China — the country’s services industries grew at the fastest pace since August as a result of gains in the retail and construction sectors (Shanghai Composite +0.4%). In Japan the Nikkei 225 was up 0.6% to a 33-month high helped by a weaker yen. Meanwhile, the FTSE 100 index fell 0.2% in early trading this morning in Europe as banking stocks weighed on the index. The FTSE Eurofirst 300 was up 0.1% at the same time. The overall increased risk appetite is pushing the yields up on US Treasuries: the 10-year benchmark yield is now above 2%, the highest in nearly nine months.