* U.S., European shares rally following China data
* Strong demand for Spanish bonds lifts euro
* Commodities surge on China's strong exports
* BP shares get reprieve on Wall St, after falling in UK
(Updates with U.S. market close)
By Al Yoon
NEW YORK, June 10 (Reuters) - World stocks rallied more
than more than 2 percent on Thursday and the euro rose for a
third straight day after China reported strong export growth
and solid demand for Spanish government bonds eased European
debt concerns.
China said its exports jumped 50 percent in May from a year
ago, reassuring investors about the path of the global economic
recovery despite the euro-zone debt crisis. Europe is China's
biggest overseas market. For details, see [].
Commodities prices surged, with crude oil and copper rising
as the Chinese export data instilled confidence in demand.
China is the world's top base metals consumer and the world's
second-biggest oil consumer.
"If China does not slow down then the world doesn't slow
down," said Keith Springer, president of Capital Financial
Advisory Services in Sacramento, California. "Everything hinges
on China. If consumer spending can get to the levels where it
was, then we are in a new bull market."
The major U.S. stock indexes rose nearly 3 percent on
Thursday, a day after a late-day sell-off that had reversed
strong gains in what has been a volatile month on Wall Street
amid questions over whether expectations of an economic
recovery have been overly optimistic.
The strength in the euro helped pull European stocks from
an early slump and spilled over to the United States. Movements
in U.S. stocks have been closely tied to swings in the euro as
investors use the currency as a barometer for confidence in the
euro-zone economy.
MSCI's all-country world index <.MIWD00000PUS> and the
Thomson Reuters Equity Global Index <.TRXFLDGLPU> both rose
about 2.3 percent.
In the U.S., the Dow Jones industrial average <> jumped
273.28 points, or 2.76 percent, to 10,172.53. The Standard &
Poor's 500 Index <.SPX> rose 31.15 points, or 2.95 percent, to
1,086.84 and the Nasdaq Composite Index <> climbed 59.86
points, or 2.77 percent, to 2,218.71.
Energy shares gave one of the biggest boosts to the market,
with the S&P energy sector <.GSPE> up 4.9 percent, making it
the top percentage gainer among S&P sectors.
Chevron Corp <CVX.N> provided the Dow with one of its major
boosts, rising 3.4 percent to $74.17.
The PHLX Oil Service Sector index <.OSX> rose 6.2 percent,
with Baker Hughes Inc <BHI.N> soaring 10.6 percent to $42.42
and Halliburton Co <HAL.N> gaining 7.4 percent to $24.22.
U.S.-traded shares of oil company BP Plc <BP.N> rebounded
12.3 percent, a day after plunging nearly 16 percent on
mounting fears about how the company will cope with the massive
costs of the oil spill in the Gulf of Mexico.
In Europe, the pan-European FTSEurofirst 300 <>
closed up 1.57 percent at 1,014.14 points.
Mining shares rose as the Australian government was said to
be diluting its tax hike plans, and banks gained on the robust
demand in Spain's government debt auction.
"There's maybe a recycling out of the safe havens, with the
dollar and gold down, and a delve back into risk," said Joshua
Raymond, strategist at City Index in London. "There are
expectations for markets to move gently higher."
The Australian government is due to soon announce major
changes to its controversial mining tax, a newspaper said on
Thursday, boosting shares of mining stocks in London.
BP's London shares <BP.L> declined 6.65 percent to 366
pence, hitting their lowest level since 1997 as they caught up
to the losses in the United States that occurred after UK
markets closed on Wednesday. See graphic on London vs U.S.
shares: http://r.reuters.com/tug39k
In Asia, Japan's Nikkei <> closed 1.1 percent higher.
FIRMING EURO
The euro, drubbed in recent days on concern that investors
may balk at funding debt-laden European nations, rose after
signs of strong demand at the Spanish bond auction. The
currency hit its high for the day as the European Central Bank
said its government bond purchase program should not be viewed
as a change to monetary policy.
The euro <EUR=> rose 1.18 percent to $1.2126 from a
previous session close of $1.1985. It had sunk below $1.19 on
Monday, to its lowest level since early 2006.
The dollar declined against a basket of major
trading-partner currencies, with the U.S. Dollar Index <.DXY>
falling 1.01 percent to 87.01. The dollar-yen <JPY=> exchange
rate was unchanged at 91.26 yen.
Europe's common currency got an earlier boost after Dai
Xianglong, chairman of $114 billion China's National Social
Security Fund, said the euro would gradually stabilize and that
the U.S. fiscal deficit remained a big concern, tempering
safe-haven demand for the dollar. []
There have been some concerns in currency markets that the
debt crisis would persuade central banks, including China's, to
cut back on their euro reserves.
U.S. Treasury debt fell as signs of improvement in weekly
U.S. jobless insurance claims added fuel to a sell-off ahead of
a 30-year bond auction. Benchmark 10-year note yields
<US10YT=RR> rose 0.15 percentage point to 3.33 percent.
Other U.S. data showed its trade deficit widened slightly
in April, a sign of consumer demand and modest recovery.
In energy and commodities, U.S. light sweet crude oil
<CLc1> rose $1.10, or 1.48 percent, to settle at $75.48 per
barrel, and spot gold <XAU=> fell $13.75, or 1.12 percent, to
$1216.60 an ounce. Copper <CMCU3> for three-months delivery on
the London Metal Exchange rose to $6,380 a tonne, versus $6,340
a tonne on Wednesday and after hitting a session high of
$6,455.
(Additional reporting by Chuck Mikolajczak, Matt Daily and
Rebekah Curtis in New York and Jeremy Gaunt and Joanne Frearson
in London; Editing by Leslie Adler)
