By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Most European stocks staged solid gains on Friday, after U.S. jobs data pointed to a strong recovery toward the end of 2012, while Spanish stocks slumped after a short-selling ban was lifted.

The Stoxx Europe 600 index added 0.3% to close at 288.20, after a 0.5% loss on Thursday. The index declined 0.5% on the week.

U.S. stocks rallied on Wall Street, with the Dow Jones Industrial Average (DJI) temporarily topping the 14,000 level after a much anticipated nonfarm-payrolls report.

"The underlying data showed employment is getting stronger and there seems to be a feeling that the glass is still half full and that nothing can weigh on the market at this moment," said Richard Perry, chief market strategist at Central Markets in London.

"Since the first trading day of 2013, investors have focused on the fact that the euro zone is not going to collapse in the near future, that U.S. data seem to be improving and that there's mass central-bank liquidity," he said.

Shares of BT Group PLC jumped 6.5%, after the U.K. telecom operator posted better-than-expected third-quarter earnings and said its full-year financial outlook remains unchanged.

Shares of Swedbank AB advanced 1.5%, as Deutsche Bank lifted the bank to buy from hold.

On a more downbeat note, shares of home-appliances firm Electrolux AB slumped 7.9%. The company said the market situation in Europe is likely to get worse, but that it will be offset by growth in North America and emerging markets.

The broader European stock markets stayed in positive territory after data from the U.S. showed 157,000 more jobs were added to the economy in January, while the unemployment rate rose to 7.9% from 7.8%. Economists surveyed by MarketWatch expected an increase of 170,000 jobs last month, with unemployment dipping to 7.7%.

Moreover, gains for December and November were revised sharply higher, with December revised to 196,000 from 155,000 and November's figure revised to 247,000.

"The January numbers aren't majorly below expectation and the sharp upwards revision in the December data will be a fillip, but despite this there's every chance we'll see some of January's gains go up in smoke," said Marcus Bullus, trading director at MB Capital, in emailed comments.

"The bulls will argue that this minor reality shot could actually be what's needed to allow investors on the sidelines the dip they need to get in and set us up for a more positive year," he said.

Meanwhile, a measure of U.S. manufacturing rose to the highest level since April.

China and Europe PMI

Back in Europe, mining firms showed positive moves, after some mixed readings on Chinese manufacturing data. HSBC's final print of the manufacturing Purchasing Managers' Index for January came in at 52.3, up from the survey's initial reading of 51.9, while the official PMI reading showed business activity remained in expansion territory, although at a slower pace than in December.

Shares of Rio Tinto PLC (RIO) rose 3.3%, while BHP Billiton PLC (BHP) rose 2.7%.

The FTSE 100 index closed 1.1% higher at 6,347.24 and gained 1% on the week.

Data from the euro zone showed the manufacturing sector continued to shrink in January, but at the slowest pace in 11 months. Markit's final PMI rose to 47.9 from 46.1 in December, coming in above an earlier estimate of 47.5.

Separately, a report showed euro-zone unemployment held steady at 11.7% in December. The unemployment rate for November was revised to 11.7% from 11.8%.

Spanish stocks on the decline

Spanish stocks were under heavy selling pressure, after authorities on Thursday lifted a ban on short selling. The short-selling ban was introduced last year amid a period of high volatility and pressure on the country's equities and sovereign bonds.

The IBEX 35 index lost 1.6% to 8,225.20, and slumped 5.7% on the week. Shares of Banco Santander SA (SAN) lost 2.4%.

Italian banks were also under pressure, after Reuters, citing judicial sources, said that employees at some of country's largest banks were being investigated for fraud related to derivatives contracts, as a scandal involving Banca Monte dei Paschi di Siena SpA seemed to spread to other institutions.

Shares of Intesa Sanpaolo SpA lost 2.9% and UniCredit SpA dropped 2.6%. A spokesperson for UniCredit said the bank wasn't aware of an investigation, while Intesa Sanpaolo wasn't immediately available to comment. The FTSE MIB index closed 0.7% lower at 17,318.94 and was off 2.3% on the week.

Among other country-specific indexes in Europe, Germany's DAX 30 index rose 0.7% to 7,833.39, but shed 0.3% on a weekly basis.

Shares of Infineon Technologies AG rose 3.7%, after J.P. Morgan Cazenove lifted its 2013 earnings estimates 5.8%, saying industrial orders have finally bottomed and will improve.

Peer firm STMicroelectronics NV jumped 4.8% in Paris, also helped higher by a 8.2% 2013 estimate change from J.P. Morgan Cazenove.

Shares of Credit Agricole SA rose in France, up 3.4%, shaking off news that the bank's fourth-quarter earnings will be bit by goodwill impairment charges of 2.68 billion euros ($3.64 billion).

Shares of LVMH Moët Hennessy Louis Vuitton gained 0.7%, after the luxury-goods firm late Thursday said it is confident for 2013 as full-year profit for 2012 jumped 12%.

France's CAC 40 index rallied 1.1% to 3,773.53, leaving it down 0.1% on the week.

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