By CARLO PIOVANOLONDON (AP) â¿¿ Stock markets rallied on Friday, with both the Dow and S&P hitting new highs, after an unexpectedly strong U.S. jobs report indicated the world's largest economy is not slowing down, as some had feared. The Labor Department said a net 165,000 jobs were created in April, above the market expectations for 140,000. The previous two months' weak figures, meanwhile, were revised up. That helped bring the unemployment rate down to 7.5 percent, the lowest in four years. Paul Ashworth, the chief U.S. economist for Capital Economics, said the report "will go a long way towards soothing fears of another spring slowdown." On Wall Street, the Dow was up 1.1 percent to 14,991.93, having earlier traded above the 15,000 mark for the first time. The broader S&P 500 was 1.2 percent higher at 1,616.89, also just off record highs. In Europe, Germany's DAX rose 2 percent to 8,122.29, its highest ever closing price. Britain's FTSE 100 closed 0.9 percent higher at 6,521.46 while France's CAC-40 ended 1.4 percent higher at 3,912.95. The U.S. jobs report helped offset news that the European Union had downgraded its economic forecasts. In its spring update, the EU said it expected the 17-country eurozone's economy to shrink 0.4 percent this year, 0.1 percentage points worse than its February prediction. It expects markedly weaker growth in Germany, the region's biggest economy, and a contraction in France, the second-largest. The fact that the economic slowdown is affecting the larger economies could push the ECB to cut interest rates again, or provide some new measures of support to credit markets in coming months. Earlier, in Asia, Hong Kong's Hang Seng rose 0.1 percent to close at 22,689.96. South Korea's Kospi rose 0.4 percent to 1,965.71 and Australia's S&P/ASX 200 was nearly unchanged at 5,129.50.