Milan stock exchange leads strong end to week in Europe

Italian-German bond spread widens to 255 points

Milan stock exchange leads strong end to week in Europe

Milan, September 6 - Despite a lackluster American jobs report, upbeat investors pushed the Milan stock exchange's main index above the 17,000-point mark Friday while most other European financial exchanges also made gains. The FTSE-Mib index climbed by 1.21% to close at 17,047 points. The optimism came despite the fact that in the United States the non-farm payrolls report showed that last month only 169,000 new jobs were added to the American economy - less than many expected. To make matters worse, figures for July were adjusted downwards substantially, meaning employment was weaker that month than previous estimated. The unemployment rate in the US did edge down slightly, to 7.3% from 7.4%, but experts said that was likely because fewer people were looking for work. Still, some saw the weakness as a positive factor because it could increase pressure on the U.S. Federal Reserve to delay the gradual reduction of its massive monthly asset purchases, which has been an important factor in economic stimulation. The Fed had been hinting that stronger growth meant it might begin to taper off asset purchases. The spread between Italy's 10-year bond and its German counterpart widened to 255 basis points by end of trading Friday, up from Thursday's close of 250 basis points. The yield on Italian 10-year paper closed at 4.50%. The spread between lending rates in the two countries is seen as an indication of investor faith in the Italian economy and its ability to cope with a lingering recession. On other European markets, Frankfurt's DAX rose by 0.49% to close at 8,275.67 points, while Paris's CAC 40 gained 1.06% to close at 4,049.19 points, and Spain's IBEX 35 climbed by 1% to 8,637.90 points. In London, the FTSE index of leading British shares gained 0.23% to close at 6,547.33.

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