* Stocks also surge on U.S. accounting rules
* Euro up vs dollar as ECB cuts rates less than expected
* Oil jumps above $52, G20 plans raise hope of turnaround
* Government debt slides as G20 hopes dims safe-haven bids
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, April 2 (Reuters) - Global stocks and oil surged
on Thursday on optimism over efforts by world leaders meeting
in London to revive global growth and on a change in U.S.
accounting rules that will help ailing banks whose troubles
triggered the worst economic crisis in decades.
Oil prices rocketed up more than 8.0 percent above $52 a
barrel on hopes that demand will rebound after world leaders at
the G20 summit agreed to pump an additional $1.1 trillion into
the global economy through extra funding for groups like the
International Monetary Fund. For details see [].
The upbeat tone at the G20 summit boosted the risk appetite
for many asset classes by raising hopes among investors that a
coordinated effort would reverse the shrinking of the global
economy for the first time since World War Two.
U.S. government bonds sank as investors fled safe-havens
for equities, while euro zone government bonds slid after the
European Central Bank cut interest rates a less-than-expected
one-quarter percentage point to 1.25 percent. []
The euro soared to nearly $1.35 after the ECB confounded
expectations for a deeper cut to 1.0 percent. But the euro
eased a bit after ECB President Jean-Claude Trichet refused to
rule out additional rate cuts in the future.
The G20 news and the U.S. Financial Accounting Standards
Board's decision to ease rules on valuing toxic assets more
than offset data that showed the number of U.S. workers filing
new claims for jobless benefits rose to a more than 26-year
high in the latest week. [].
European stocks and an index <.MIWD00000PUS> for global
stocks rose more than 4.0 percent, while Wall Street closed
nearly 3 percent higher and an equities index <.MSCIEF> for
emerging markets surged 5.8 percent.
Copper, a harbinger of global growth, surged to a
five-month high, and other industrial metals, including nickel,
tin, zinc and lead, all rose on hopes of economic recovery.
[]
While investors bid up asset prices in reaction to the G20
meeting, many cautioned the global economy remains weak, as
seen in this week's rise in U.S. crude oil inventories to a
16-year high and Thursday's data showing job layoffs have yet
to peak.
"The current crude oil market rally is associated with some
optimism and expectations emerging from the G20 meeting in
London," said Kyle Cooper, director of research at IAF Advisors
in Houston. "However, rising oil prices right now are not based
on fundamentals as worldwide demand is still poor while
inventories are high."
The Dow Jones industrial average <> closed up 216.48
points, or 2.79 percent, at 7,978.08. The Standard & Poor's 500
Index <.SPX> gained 23.30 points, or 2.87 percent, at 834.38.
The Nasdaq Composite Index <> rose 51.03 points, or 3.29
percent, at 1,602.63.
Shares also were lifted after government data showed U.S.
factory orders rose in February for the first time in seven
months, adding to positive economic news earlier in the week.
"There seems to be a sense that perhaps we have reached
bottom and we're turning to the upside," said Bucky Hellwig,
senior vice president at Morgan Asset Management in Birmingham,
Alabama.
Earlier in Europe, the pan-European FTSEurofirst 300
<> index of top shares surged 4.9 percent to 781.48
points. The index is still down about 6 percent for the year.
The euro was strengthened after Trichet said officials had
yet to decide on "non-standard" policy measures and would offer
more details at the central bank's next policy meeting in May.
"The ECB is still concerned about preserving the integrity
of its currency," said Boris Schlossberg, head of FX research
at GFT Forex in New York. "They do not want to debase it in any
way, shape or form by doing radical unconventional measures."
The euro <EUR=> rose 1.71 percent at $1.3457. The dollar
fell against a basket of major currencies, with the U.S. Dollar
Index <.DXY> off 1.27 percent at 84.336.
Against the yen, the dollar <JPY=> added 0.85 percent at
99.38.
U.S. government bonds fell as signs of stability in
financial markets, as suggested by the accounting changes, tend
to damp demand for safe-haven U.S. Treasuries, the investment
of choice when investors sense uncertainty.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
30/32 in price to yield at 2.76 percent. The 2-year U.S.
Treasury note <US2YT=RR> shed 5/32 in price yield 0.88
percent.
U.S. crude <CLc1> settled at $52.64, up $4.25, or 8.78
percent. London Brent crude <LCOc1> gained $4.31, or 8.9
percent, to settle at $52.75 a barrel.
Gold ended lower, falling below $900 an ounce during the
session, due to renewed talk of gold sales by the IMF and
reduced safe-haven demand as Wall Street rallied.
U.S. gold for June delivery <GCM9> settled down $18.80, or
2.0 percent, at $908.90 in New York.
(Reporting by Leah Schnurr, Steven C. Johnson, Pedro Nicolaci
da Costa and Frank Tang in New York and Joanne Frearson,
Christopher Johnson and Kirsten Donovan in London; writing by
Herbert Lash; Editing by Leslie Adler)
