RTTNews - The European markets rose for the second day on Friday after stronger-than-expected U.S. jobs data raised optimism about recovery in the world's largest economy.

The U.S. Labor Department said in its report that non-farm payroll employment fell by 247,000 jobs in July following a revised decrease of 443,000 jobs in June. Economists had been expecting employment to fall by 325,000 jobs compared to the drop of 467,000 jobs originally reported for the previous month.

The U.S. Labor Department also said that the unemployment rate unexpectedly edged down to 9.4% in July from 9.5% in June. With the decrease, the unemployment rate fell for the first time since April of 2008. The decrease surprised economists, who had been expecting the unemployment rate to edge up to a twenty-six year high of 9.6%.

Meanwhile, German industrial production fell 0.1% month-on-month in June after an upwardly revised increase of 4.3% in May, the Federal Ministry of Economics and Technology said Friday. Economists had forecast an increase of 0.5% in June.

However, German exports in June registered the biggest monthly growth since September 2006 on rising global demand. According to a Destatis report, exports jumped 7% month-on-month in June, much larger than the revised 0.2% rise seen in May and 0.9% expected by economists. Meanwhile, imports grew 6.8%, reversing May's revised 1.9% drop. Economists were looking for a monthly growth of 0.7% in imports.

Crude for September delivery rose $0.35 to $72.29 a barrel on the New York Mercantile Exchange, by the time the European markets closed.

The FTSEurofirst 300 index of pan-European blue chips closed 1.27% higher at 950.38 points, while the narrower DJ Stoxx 50 index rose 1.64% to 2,356.87 points.

Around Europe, the U.K.'s FTSE 100 index rose 0.87% to 4,731.56, while France's CAC 40 index surged up 1.25% to 3,521.14 and Germany's DAX index climbed 1.66% to 5,458.96.

Economic sensitive banking stocks were among the gainers. BNP Paribas, France's largest bank, climbed 3%, while Deutsche Bank, Germany's biggest lender, surged up 3.3% and Banco Santander, Spain's largest bank, rose 2.1%. Barclays, Britain's largest bank, gained 1.7%.

Anglo-Dutch computer services provider Logica rose 2.4% after the company reported a four-fold jump in first-half profit.

Volkswagen, Europe's biggest carmaker, climbed 3.7% after the company raised its full year sales forecast.

France Telecom, France's biggest phone company, surged up 3.6% after JPMorgan upgraded the stock to overweight from neutral.

On the other hand, Royal Bank of Scotland, Britain's biggest government-owned bank, slipped 12.1% after the company reported an unexpected first-half loss.

Puma, the world's third largest sports goods maker, dropped 4.6% after the company reported a smaller-than-expected fall in second quarter earnings but said that it expects a challenging second half due to the recession.

Peugeot, Europe's second biggest carmaker, lost 5.4% after S&P cut the company's debt rating to junk.

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