* U.S. stocks edge higher amid growing hopes of recovery
* U.S. dollar rises as jobs data dulls market optimism
* Bonds slip as U.S. jobs losses were fewer than feared
* Oil prices slip as jobs report points to less demand
(Recasts with U.S. markets, changes dateline, previous
LONDON)
By Herbert Lash
NEW YORK, April 3 (Reuters) - U.S. stocks edged higher and
the dollar rose on Friday as gloomy data on the U.S. labor
market failed to eclipse growing sentiment among investors that
the worst of a deep financial crisis may be over.
Crude prices slipped after surging nearly 9 percent the day
before as the shedding of 663,000 American jobs in March
weighed on oil futures even amid rising optimism that Group of
20 actions taken on Thursday will help spur recovery.
U.S. Treasury and short-dated euro zone government bond
prices fell on the perception of improving economic conditions,
which undercut the safe-haven bid for bonds.
Investors continued to sell government bonds, notably
shorter-dated euro zone paper, even as stocks in early trade
gave back some gains, a day after the European Central Bank
disappointed analysts by cutting interest rates by less than
expected.
"Investors are more confident than they were that we could
be at the bottom of the downturn globally," said Nick
Stamenkovic, bond strategist at RIA Capital Markets in
Edinburgh. "That's taken the shine off bonds, supporting the
risk assets, particularly equities," he said.
The S&P 500 and Nasdaq rose while the Dow briefly turned
positive as technology stocks extended gains and the financial
sector reversed an earlier drop.
Technology shares rose after results from BlackBerry maker
Research In Motion <RIM.TO> <RIMM.O> surpassed expectations.
After 1 p.m., the Dow Jones industrial average <> was
down 21.74 points, or 0.27 percent, at 7,956.34. The Standard &
Poor's 500 Index <.SPX> was up 0.20 points, or 0.02 percent, at
834.58. The Nasdaq Composite Index <> was up 6.44 points,
or 0.40 percent, at 1,609.07.
European shares closed lower, with drugmakers and oil
companies falling, as contractions in the British and euro zone
services sectors provided further evidence of recession on top
of the U.S. jobless report.
The British and euro zone's service sectors contracted
again in March, but not as rapidly as prior months, offering
some hope that the worst of the downturn may have passed.
[]
"After the euphoria of the G20, some economic reality has
kicked in," said Philip Lawlor, chief portfolio strategist at
Nomura in London. "We had a good run and some people have
decided to lock profits in."
The pan-European FTSEurofirst 300 index of top shares fell
1.3 percent to 771.60 points. The index rose 7.1 percent over
the week and is up more than 19 percent from a lifetime low on
March 9.
Drugmakers were among the biggest losers. Novo Nordisk
slumped 13.7 percent after a U.S. advisory panel failed to back
its experimental diabetes drug Victoza, or liraglutide.
The bleak U.S. jobs report kept a lid on gains in the
dollar, only slightly dimming the optimism that swelled after
world leaders at the G20 summit in London agreed to pump $1.1
trillion into the world economy to fight the crisis.
Gains were limited as the dollar tends to rise in response
to bad news because investors see it as the safest store of
value at a time when economies across the globe are shrinking.
"There had been a degree of enthusiasm that perhaps the
world economy has seen the worst, and the jobs data tempered
that enthusiasm a bit," said Vassili Serebriakov, currency
strategist at Wells Fargo in New York.
The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 0.03 percent at 84.349. Against
the yen, the dollar <JPY=> rose 0.39 percent to 99.94.
The euro <EUR=> fell 0.19 percent to $1.3436.
Bond prices fell. The benchmark 10-year U.S. Treasury note
<US10YT=RR> slipped 31/32 in price to yield 2.88 percent. The
2-year U.S. Treasury note <US2YT=RR> shed 5/32 in price to
yield 0.97 percent.
U.S. light sweet crude oil <CLc1> fell 69 cents, or 1.31
percent, to $51.95 a barrel.
"The jobs report was apparently priced in and was pretty
much in line with expectations," said Mike Fitzpatrick, vice
president at MF Global in New York.
Asian stocks rose for a fourth day on a risk-taking rally
spurred by the G20 summit. The MSCI index of Asia Pacific
stocks outside Japan <.MIAPJ0000PUS> edged up 0.7 percent, and
is now more than 20 percent higher since late February.
Japan's Nikkei share average <> closed up 0.3 percent,
after being higher for most of the session.
(Reporting by Steven C. Johnson, Richard Leong in New York and
Jamie McGeever, Brian Gorman, Chris Baldwin in London; writing
by Herbert Lash, Editing by Chizu Nomiyama)
