New York (AFP) - Data showing that the US economy added more than a quarter of a million jobs last month soothed recession worries Friday, bringing a rebound in stocks including for troubled midsized American banks.
Just a day before, equities took a lashing over worries surrounding the economic impact of interest rate hikes -- including on smaller US lenders.
But the world's biggest economy added 253,000 jobs last month, up from a revised 165,000 figure in March, the US Labor Department said.
The numbers show that the jobs market remains strong despite banking sector upheaval, higher borrowing costs and uncertainty surrounding a potential government default.
"The key takeaway from the report is that it substantiates why the Fed isn't inclined to cut rates soon," said Briefing.com analyst Patrick O'Hare, referring to the US Federal Reserve.
But at the same time, continued strength in the labor market "lends some hope to the idea that a soft landing for the economy is still possible," he added.
The Fed hiked interest rates on Wednesday by another quarter percentage point, as it seeks to bring down inflation.
But the central bank signaled it could pause at its next meeting, as concern over the impact of higher interest rates mounted, particularly following the collapse of three midsized banks in March and the failure of another one this week.
On Friday, Chicago Fed president Austan Goolsbee said that it remains "way too premature" to say if the Fed will hike rates again in June.
But he noted in an interview with Fox Business that regional banks' troubles -- even if they do not spiral into a crisis -- will likely weigh on the economy.
Investors have pondering if the ongoing US banking rout will convince the Fed to begin cutting interest rates sooner than planned.
But shares in regional US lenders rebounded on Friday with PacWest Bancorp jumping 81.7 percent, after its shares lost half their value on Thursday.
Shares in Western Alliance rose 49.2 percent, after having slumped 38.5 percent.
Apple shines
Sentiment was also boosted after US tech titan Apple said first-quarter iPhone sales and services revenue beat forecasts, capping a successful earnings season for the sector.
Apple shares ended 4.7 percent higher.
Overall, Wall Street's main indices rose about two percent, snapping a four-day losing streak.
Europe's main equity markets also closed with solid gains.
In Asia, Hong Kong stocks finished half a percent higher after paring early gains, with tech and property companies among the big winners.
Shanghai, however, shed nearly half a percent as fears of China's uneven recovery set in, and a less-than-stellar earnings season failed to impress.
Oil prices jumped, with the main US contract rising back above $70 per barrel, lifted by the strong jobs data.
"We're seeing some decent gains today on concern that OPEC+ might consider further production cuts," said market analyst Michael Hewson at CMC Markets.
Key figures around 2030 GMT
New York - Dow: UP 1.7 percent at 33,674.38 (close)
New York - S&P 500: UP 1.9 percent at 4,136.25 (close)
New York - Nasdaq: UP 2.3 percent at 12,235.41 (close)
London - FTSE 100: UP 1.0 percent at 7,778.38 (close)
Frankfurt - DAX: UP 1.4 percent at 15,961.02 (close)
Paris - CAC 40: UP 1.3 percent at 7,432.93 (close)
EURO STOXX 50: UP 1.3 percent at 4,340.43 (close)
Hong Kong - Hang Seng Index: UP 0.5 percent at 20,049.31 (close)
Shanghai - Composite: DOWN 0.5 percent at 3,334.50 (close)
Tokyo - Nikkei 225: Closed for holiday
Euro/dollar: UP at $1.1022 from $1.1012 on Thursday
Pound/dollar: UP at $1.2632 from $1.2574
Dollar/yen: UP at 134.83 yen from 134.29 yen
Euro/pound: DOWN at 87.22 pence from 87.58 pence
Brent North Sea crude: UP 3.9 percent at $75.30 per barrel
West Texas Intermediate: UP 4.1 percent at $71.34 per barrel
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