* US Feb payrolls rise; jobless rate lowest since April 09
* U.S. stocks, world stocks fall on oil gains
* U.S. dollar fails to benefit from jobs data
(Updates with crude settlements, other prices)
By Caroline Valetkevitch
NEW YORK, March 4 (Reuters) - World stocks and the U.S.
dollar fell on Friday as oil prices rose on escalating tensions
in Libya, offsetting a U.S. jobs report that showed the
economic recovery shifting up a gear.
Gold advanced above $1,430 an ounce and U.S. Treasury debt
prices gained as the Libyan turmoil drove investors to seek
safe-haven assets.
U.S. crude oil prices jumped to their highest since
September 2008, and Brent crude rose above $116 as Libyan
security forces clashed with rebels near the major oil terminal
of Ras Lanuf.
The MSCI all-country world stock index <.MIWD00000PUS> was
down 0.3 percent. On Wall Street, stocks fell a day after
posting their best one-day rise in three months.
"The (market) battle is: has the economy turned in a
permanent way, or are higher oil prices going to slow
everything down," said Bernie McGinn, president at McGinn
Investment Management in Alexandria, Virginia.
The U.S. jobless rate unexpectedly fell and employers
added 192,000 jobs. But the market rallied on Thursday on
expectations of solid hiring by private employers so the data
had a muted impact.
The Labor Department reported hiring by U.S. employers in
February hit the highest level since last May as unemployment
dipped to 8.9 percent, an almost two-year low.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
U.S. payrolls jump, jobless rate near 2-year low
[]
INSTANTVIEW: []
SNAP ANALYSIS: U.S. jobs data showing some consistency
[]
Reuters Insider-Strong Payrolls Data Puts Focus on Fed's QE
http://link.reuters.com/mub48r
Graphic- US payrolls:
http://r.reuters.com/rud48r
Graphic- US unemployment:
http://r.reuters.com/kud48r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The Dow Jones industrial average <> was down 88.32
points, or 0.72 percent, at 12,169.88. The Standard & Poor's
500 Index <.SPX> was down 9.82 points, or 0.74 percent, at
1,321.15. The Nasdaq Composite Index <> was down 14.07
points, or 0.50 percent, at 2,784.67.
The U.S. employment data did little to alter expectations
that the Federal Reserve would maintain its loose monetary
policy, driving down the dollar to a four-month low against a
basket of major currencies.
The euro <EUR=EBS rose above the key psychological $1.40
mark and headed for its biggest weekly rise in six weeks. The
single currency is on course to make a run toward $1.4283, a
key resistance level reached last November, after European
Central Bank President Jean-Claude Trichet strongly hinted on
Thursday at an interest rate rise in April.
Ratings agency Fitch's revision of its outlook for Spain's
sovereign credit rating to negative caused the euro to pare
some gains, however.
"(Fed Chairman Ben) Bernanke may be relieved to see another
month of improvement in the unemployment rate, but given the
underlying weakness of the report, the central bank will still
argue that unemployment remains extremely high and therefore
continued stimulus could be warranted," said Kathy Lien,
director of currency research at GFT in New York.
In the U.S. government debt market the benchmark 10-year
note <US10YT=RR> was up 18/32 in price, its yield easing to
3.49 percent from 3.56 percent late on Thursday.
Brent crude for April delivery <LCOJ1> settled at $115.97 a
barrel, gaining $1.18, or 1.03 percent, after rising above
$116. Brent oil has risen about 15 percent since the end of
January.
"Tension in the Middle East is like a runaway train," said
Michael Hewson, an analyst at CMC Markets. "Once it starts,
it's very difficult to stop. And if there is a danger that it
impacts the supply chain, people will understandably get
nervous."
Investors worry rising oil prices could also affect demand
for industrial metals, including copper.
Three-month copper on the London Metal Exchange <CMCU3>
fell to $9,895 a tonne, from a last bid of $9,910 a tonne on
Thursday.
Spot gold <XAU=> hit a high of $1,431.85 an ounce and was
up 0.8 percent at $1,427.31.
In the European stock market, the FTSEurofirst 300 <>
was down 0.6 percent.
(Additional reporting by Robert Gibbons, Rodrigo Campos and
Nick Olivari in New York; and Jeremy Gaunt and Claire Milhench
in London; Editing by Leslie Adler, Andrew Hay and Diane
Craft)
