May 10, 2012 / 12:42 AM / 6 years ago

World stocks, euro advance on Europe, jobs data

NEW YORK (Reuters) - Global stocks advanced 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.

Market prices are reflected in a glass window at the Tokyo Stock Exchange in Tokyo. REUTERS/Toru Hanai

European and U.S. equity markets rose after data showed U.S. claims for unemployment benefits edged lower last week, a sign of comfort after April’s weak employment growth was perceived as a harbinger of a worsening U.S. labor market.

U.S. stock index futures slid after the market’s close after JPMorgan Chase & Co (JPM.N) disclosed it had incurred “significant mark-to-market losses” in April after a hedging strategy failed.

Chief Executive Jamie Dimon said the bank’s corporate and private equity segment expects to lose $800 million in the second quarter and that the loss could “easily get worse.” However, the bank’s capital plan was not impacted, he said.

JPMorgan’s stock fell as much as 6.7 percent to $38.00 in after-hours trading. S&P 500 futures fell 11.6 points.

Earlier in the day, investors used a recent streak of declines to buy beaten-down assets, 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.

“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 Nasdaq closed slightly lower after a disappointing outlook from tech bellwether Cisco Systems Inc (CSCO.O) due to uncertainty over Europe and government policy. Cisco shares tumbled 10.5 percent to $16.81.

The Dow Jones industrial average .DJI closed up 19.98 points, or 0.16 percent, at 12,855.04. The Standard & Poor’s 500 Index .SPX rose 3.41 points, or 0.25 percent, to 1,357.99. The Nasdaq Composite Index .IXIC fell 1.07 points, or 0.04 percent, to 2,933.64.

Helping feed 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.

“The EFSF agreement could be viewed as euro-positive, and data in the U.S. and overseas was not negative,” Nick Bennenbroek, head of currency strategy at Wells Fargo in New York, said of the euro’s rebound.

“So this is not a turnaround, and the whole political process in Greece is still playing out,” he said.

The euro rose 0.11 percent at $1.2946.

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.

Adding to the brighter picture from Europe, the Spanish government late on Wednesday effectively took over Bankia SA (BKIA.MC), one of Spain’s biggest banks, and said more measures to strengthen its ailing banks would be announced on Friday.

The FTSE Eurofirst .FTEU3 index of top European shares closed 0.45 percent higher at 1,019.05.

MSCI’s all-country world equity index .MIWD00000PUS gained 0.3 percent to 315.97, its first gain after six straight days of losses. The emerging market index .MSCIEF rose 0.3 percent to 980.69.

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 Organization 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.

But 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 0.46 percent at 80.00 yen. The U.S. dollar index .DXY was up 0.08 percent to 80.143.

Gold snapped a three-day losing streak as bargain hunters waded into the market after prices fell sharply this week.

Spot gold prices rose $6.10 to $1,594.90 an ounce.

U.S. gold futures for June delivery settled up $1.30 an ounce at $1,595.50.

Editing by James Dalgleish and Dan Grebler

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