GLOBAL MARKETS-Oil surges, stocks rise on U.S. economy hopes

(Recasts with U.S. markets; changes dateline; previous LONDON)

By Herbert Lash

NEW YORK, May 2 (Reuters) - Oil jumped more than 3 percent to over $115 a barrel and U.S. and European stocks rose on Friday as U.S. jobs data suggested an economic slowdown in the United States may not be as deep as many investors feared.

In the U.S. stock market, however, the Nasdaq fell, as technology shares slumped after Sun Microsystems, a business computer maker, reported an unexpected net loss and lower revenues, causing several brokers to cut their ratings and share price targets.

The dollar jumped to two-month highs versus the yen and against a basket of currencies after economic reports bolstered expectations that the Federal Reserve is nearing the end of a rate-cutting cycle, enhancing the U.S. currency's appeal.

U.S. Treasury debt prices fell on data showing that fewer U.S. jobs were lost in April than economists had feared and the unemployment rate unexpectedly improved, raising hopes the U.S. economic downturn is not gathering steam.

Investors hope that a stable job market will allay consumers' fears at a time U.S. households have been grappling with soaring energy and food costs and declining home values.

"People are willing to accept the fact that we may have a very slow, stagnant economy. But the prospect of a sharp downturn seems to be less and less likely, hence the sigh of relief," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

Shares on both sides of the Atlantic added to Thursday's gains, pushing the Dow just 1 percent shy of erasing all its losses this year before it retreated from earlier solid gains. Stocks in the financial and energy-related sector pushed gains in the broad market.