* World stocks rise after U.S. jobless claims data
* Oil falls on Chavez's Libya mediation proposal
* ECB boost euro with inflation comments
(Updates prices, details, adds ISM data, graphic)
By Caroline Valetkevitch
NEW YORK, March 3 (Reuters) - U.S. stocks jumped as weekly
jobless claims fell to their lowest in more than 2-1/2 years on
Thursday, while the euro rallied against the U.S. dollar as the
ECB president warned about inflation risks.
Oil prices declined, also bolstering world stocks, after a
proposal by Venezuela President Hugo Chavez to try to broker a
peace deal in Libya.
World stocks as measured by MSCI <.MIWD00000PUS> were up
0.8 percent and, on Wall Street, the Dow Jones industrial
average <> was up 156 points, or 1.3 percent.
The euro soared after European Central Bank President
Jean-Claude Trichet said the bank will exercise "strong
vigilance" over rising inflation, and may raise interest rates
as soon as next month. For Trichet's comments see
[]. Gold prices also fell on the comments.
Oil jumped to approach 2-1/2-year highs on Wednesday as
violence escalated in oil producer Libya, but Brent crude oil
<LCOc1> eased on Thursday, and was last down $1.49 at $114.86 a
barrel.
"A peace plan would really be a great sign for markets,"
said Michael Mullaney, a portfolio manager who helps manage
$9.5 billion at Fiduciary Trust Co in Boston.
Investors worry that if it is not soon arrested, political
instability could spread to major oil producer Saudi Arabia, a
central U.S. ally in the region, and other oil suppliers.
Rising oil and other commodity prices are pushing up prices
for goods around the world, causing the heightened concern
about inflation risks.
The latest batch of purchasing managers' indexes (PMI) in
Europe and elsewhere again pointed to fast-building
inflationary pressures, with Europe's private sector surging at
its fastest pace in almost five years in February. For details,
see []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global and euro zone services PMI graphic:
http://r.reuters.com/vax38r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
U.S. data showed the nation's services sector grew at a
slightly faster pace in February and was at the highest level
since August 2005.
Other U.S. data showed initial claims for U.S. state
unemployment benefits dropped to the lowest since May 2008, the
Labor Department said.
That helped sentiment in U.S. stocks, with the labor market
still seen among the weakest areas of the U.S. economy.
Investors are anxiously awaiting the U.S.'s monthly payrolls
report, due Friday.
The Dow was last up 159.27 points, or 1.32 percent, at
12,226.07, while the Standard & Poor's 500 Index <.SPX> was up
15.45 points, or 1.18 percent, at 1,323.89. The Nasdaq
Composite Index <> was up 40.09 points, or 1.46 percent,
at 2,788.16.
As stocks rose, U.S. bonds fell. The benchmark 10-year note
<US10YT=RR> was down 15/32, its yield rising to 3.53 percent
from 3.47 percent on Wednesday, after the jobless data.
The euro pierced resistance around $1.3958, its 200-week
moving average, to hit as high as $1.3976 <EUR=EBS>, its
strongest since Nov. 8 and on track to test the psychologically
important $1.40 level.
Spot gold <XAU=> fell as low as $1,417.22 an ounce.
(Additional reporting by Wanfeng Zhou, Ellen Freilich and
Ryan Vlastelica in New York; Jeremy Gaunt, Caroline Copley,
Neal Armstrong and Simon Falush in London)
(Editing by Theodore d'Afflisio)
