Global stocks, euro rise on jobs, better Europe view

NEW YORK Fri May 11, 2012 1:15am IST

Traders work on the floor of the New York Stock Exchange May 10, 2012. REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange May 10, 2012.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - Global stocks rose for the first time in seven sessions on Thursday on relatively encouraging U.S. jobs data and improved investor sentiment regarding Europe's festering debt crisis.

U.S. and European stocks climbed after data showed U.S. claims for unemployment benefits fell last week, an upbeat sign after April's weak employment growth was perceived as a harbinger of a worsening U.S. labor market.

Investors also used a recent streak of declines to step into the markets, lifting the euro against the dollar for the first time in nine sessions and snapping a six-day losing streak for the Dow Jones industrial average.

The Spanish government effectively took over Bankia SA, one of Spain's biggest banks, late on Wednesday and said more measures to strengthen its ailing banks would be announced on Friday.

Also feeding risk appetite was an agreement late Wednesday by the board of the European Financial Stability Facility to release a scheduled payment to Greece, allowing the country to meet near-term bond redemptions.

Euro zone officials on Thursday said countries in the bloc are prepared to keep financing Greece until a new government is formed, whether one emerges from Sunday's election or if new elections have to be held next month.

"You are seeing traders and investors come into some of these very oversold sectors and buying on the dips. Then suddenly, the people who are scared decide to start selling into it," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

The euro was up 0.14 percent at $1.2950.

The Dow Jones industrial average was up 35.80 points, or 0.28 percent, at 12,870.86. The Standard & Poor's 500 Index was up 5.32 points, or 0.39 percent, at 1,359.90. The Nasdaq Composite Index was up 1.34 points, or 0.05 percent, at 2,936.05.

In Europe, the FTSE Eurofirst index of top regional shares closed 0.45 percent higher at 1,019.05.

MSCI's all-country world equity index gained 0.4 percent to 316.20, its first gain after six straight days of losses.

Oil traded slightly below $113 per barrel as dealers weighed the impact of Chinese trade data on the global economy against the encouraging U.S. jobs figures.

Signs of a long-expected downturn in China finally appeared in trade data, with weaker-than-expected exports and stalling headline import growth signaling that government spending is crucial to keeping the Chinese economy humming.

Rising supply from the Organisation of Petroleum Exporting Countries added to downward pressure on crude. OPEC's monthly report said oil supply was plentiful and in excess of market requirements.

Brent crude retreated to settle down 47 cents at $112.73. U.S. crude rose 27 cents to settle at $97.08 a barrel.

U.S. Treasury debt prices fell as stronger-than-expected U.S. jobs data and a pause in the steady stream of worrisome news from Europe helped erode appetite for safe-haven assets.

Government debt pared losses after an auction of 30-year bonds at a yield below market expectations as investors bid more aggressively for the U.S. debt.

The benchmark 10-year U.S. Treasury note was down 8/32 in price to yield 1.89 percent.

A backdrop of caution remained.

"Treasury is still - whether it should be or not - the only place where people can get a flight to quality, so they keep coming here," said Joseph Leary, a trader with Citigroup in New York.

Against the Japanese yen, the dollar was up 0.35 percent at 79.91 yen. The U.S. dollar index was up 0.09 percent to 80.153.

Spot gold prices rose $5.75 to $1,594.60 an ounce.

(Editing by James Dalgleish)

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