SYDNEY (Dow Jones)--The Australian share market was boosted to a seven-day high Thursday after Wall Street surged overnight as the U.S. economy showed signs of life and the market became optimistic about upcoming U.S. earnings reports and bank stress tests in Europe. Stronger-than-expected Australian employment data added to the bullish tone. The benchmark S&P/ASX 200 closed up 102.1 points, or 2.4%, at a seven-day high of 4356.7. Share trading volume improved to a moderate A$5.0 billion. Overnight, Wall Street's S&P 500 surged 3.1%, its third-biggest one-day rise this year, after the International Council of Shopping Centers and Goldman Sachs Retail Chain Store Index last week saw its biggest on-year rise in two months. Also fueling the bounce in U.S. equities was improved earnings guidance from State Street and some encouraging details on European bank stress tests, due to be released on July 23. "Equity markets are bouncing from oversold territory and I think it will continue," said Macquarie Private Wealth Division director Martin Lakos. "There's no doubt that equities were discounting every possible worst-case outcome. We are now starting to see some of those concerns unwind, in terms of the stress testing of banks in Europe, U.S. earnings and the U.S. economy." Financials led broad-based gains after their U.S. peers surged overnight. Among the major banks, ANZ Bank rose 4.3% to A$22.14, Westpac rose 3.6% to A$22.02, National Australia Bank rose 2.9% to A$23.76 and Commonwealth Bank of Australia rose 2.7% to A$49.55. In the property sector, Westfield rose 2.6% to A$12.49 and Lend Lease rose 2.7% to A$7.50, which in financial services, AMP rose 2.3% to A$5.25 and Macquarie Group surged 6.3% to A$38.58. In the mining sector, BHP rose 2.0% to A$38.16, Rio Tinto rose 1.8% to A$67.05, Fortescue rose 4.1% to A$4.35, Oz Minerals rose 3.4% to A$1.07 and Newcrest rose 2.1% to A$34.18. Similarly in the energy sector, Origin Energy rose 2.7% to A$15.08, Santos rose 2.5% to A$12.76 and Woodside rose 1.9% to A$42.09, aided by a surge in crude oil to US$74.67. Consumer staples were strong, with Foster's up 2.5% to A$5.76 and Wesfarmers up 3.8% to A$28.52, as was the consumer discretionary sector, with Harvey Norman up 5.8% to A$3.65. Among industrials, Leighton rose 3.2% to A$29.85 and Qantas rose 3.2% to A$2.28, while in health care, CSL rose 3.1% to A$33.25. CMC Markets analyst David Taylor said global equities were showing growing signs of a base. "The risk trade was back on today and withstood the threat of some mid-session profit taking," said Taylor. He noted recent bullish signs, after the recent sell-off, including a retreat in U.S. Treasury prices, a lift in the Aussie dollar and the euro, relatively low volatility and the above-consensus Australian jobs data. Other traders said the market was pricing out some of its worst-case view. "People are happy to see the market going up, but I don't think many people will be doing a complete reshuffle on today's movement," said RBS head of Sydney sales Justin Gallagher. "There's no question we have seen increasing comfort about the European bank stress tests and the ICSC comments about U.S. retail sales were pretty extraordinary considering all the other economic data we've seen out of the U.S.," he said. "If we continue to see some stability in the European banking system and a stabilization of U.S. economic data, then a double-dip recession will be off the agenda." Gallagher expects global equities to take an optimistic track before Monday's earnings report by Alcoa and the U.S. retail sales report next Wednesday. Australian employment data for June, which showed a 49,500 rise in jobs and a 5.1% jobless rate, versus expectations of a 15,000 gain and 5.2% unemployment, pushed the Australian dollar up to 0.8744, from 0.8643 at the New York close. -By David Rogers, Dow Jones Newswires: 61-2-8272-4693: david.rogers1@dowjones.com

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