European stocks close

European stocks climbed, completing their first weekly rally of 2014, as investors weighed data that showed the U.S. unemployment rate unexpectedly fell in December while hiring slowed.

Labor Department data showed the U.S. unemployment rate unexpectedly dropped to 6.7 percent in December, the lowest since October 2008, as more people left the labor force. The report also showed U.S. employers hired the fewest number of workers since January 2011. The 74,000 gain in payrolls, less than the most pessimistic projection in a Bloomberg survey, followed a revised 241,000 advance the prior month.

The Federal Reserve, which is trimming the pace of its bond purchases this month, may reduce them by $10 billion in each of its next seven meetings and end the program in December 2014, according to the median forecast of economists in a Bloomberg survey last month.

National benchmarks rose in 15 of the 18 western European markets. The U.K.’s FTSE 100 jumped 0.7 percent. Germany’s DAX and France’s CAC 40 rallied 0.6 percent.

Swatch gained 3.6 percent to 569 Swiss francs. The biggest maker of Swiss watches, which will release 2013 earnings on Feb. 20, said revenue rose 8.3 percent last year.

Metro increased 2.8 percent to 34.95 euros. The retailer’s biggest shareholder, Franz Haniel & Cie., dismissed a report that it may push for its breakup as “outrageous nonsense.” Franz Haniel, which owns a 30 percent stake, may ask Metro to sell its Real, Kaufhof or Media-Saturn units, Platow Brief wrote without citing anyone.

Deutsche Lufthansa AG jumped 8.9 percent to 17.35 euros, its biggest rally since November 2008. Europe’s second-biggest airline said it expects costs per passenger to drop by 2 percent this year. It also forecast fuel expenses of 6.9 billion euros ($9.4 billion), 200 million euros less than the 2013 estimate.

Brenntag AG fell 2.4 percent to 126.70 euros. UBS AG lowered its recommendation on the shares to neutral from buy, saying it sees limited potential for further gains after last year’s rally. The world’s biggest distributor of chemicals soared 36 percent in 2013.