* MSCI world stock index hits two-week highs
* Improved risk appetite weighs on yen
* Safe-haven government bonds fall, yields climb
(Updates with U.S. markets open)
By Walter Brandimarte and Ian Chua
NEW YORK/LONDON, June 3 (Reuters) - Global stocks hit a
two-week high on Thursday while the Japanese yen came under
additional pressure as expectations that Friday's U.S. jobs
data will be stronger than forecast encouraged investors to
take on risk.
Prices of gold and U.S. Treasuries fell as risk appetite
increased following a report that significantly revised up the
number of private sector jobs created in the United States in
April. Jobs created in May were fewer than forecast, however.
But U.S. stocks lost some ground after data showing the
U.S. non-manufacturing sector grew less than expected in May,
even as it added workers for the first time since December
2007.
For details on recent data, see []
and[].
"You have a combination of economic data and stocks with a
much better tone today," said Richard Lee, managing director of
fixed income at Wall Street Access in New York. "The
flight-to-quality has started to fade a bit."
Global stocks as measured by MSCI <.MIWD00000PUS>
climbed 1.0 percent, having earlier reached highs last seen on
May 19.
On Wall Street, however, the Dow Jones industrial average
<> edged up 5.06 points, or 0.05 percent, to 10,254.60. The
Standard & Poor's 500 Index <.SPX> was up 0.49 points, or 0.04
percent, at 1,098.87, and The Nasdaq Composite Index <>
gained 5.35 points, or 0.23 percent, at 2,286.42.
Wall Street investors were also focusing on the performance
of retailer companies, which reported an average growth of 2.5
percent in their May same-store sales, slightly under the
expectation of a 2.6 percent growth. The S&P retail index
<.RLX> was practically flat.
In Europe, the FTSEurofirst 300 index <> of top
European shares put on 1.3 percent, with financial shares such
as Banco Santander <SAN.MC> and Barclays <BARC.L> among the
bright spots.
Energy stocks ended a four-day losing run, with BP <BP.L>,
which had been battered by the Gulf of Mexico disaster, rising
0.5 percent.
Earlier, Tokyo's Nikkei share average <> rose over 3.0
percent, posting its biggest one-day rise in six months.
Emerging markets stocks <.MSCIEF> rallied 1.7 percent,
according to an MSCI index.
YEN PRESSURED
The Japanese currency, already on a shaky footing with
political uncertainty in Japan weighing, fell across the board.
The dollar rose 0.22 percent versus the yen <JPY=> to 92.38.
"Financial market conditions have stabilized in the near
term. There's renewed risk-taking and that leads to a weaker
yen," said Lee Hardman, currency analyst at BTM-UFJ.
Also, with the market speculating that Japan's next prime
minister would take a tougher stance in fighting the yen's
strength, traders took this as an opportunity to trim long
positions in the currency.
Finance minister and candidate for ruling party head -- and
the premiership -- Naoto Kan surprised markets earlier this
year by saying he wanted the yen to weaken more and that most
businesses were in favor of a dollar/yen rate around 95 yen.
Against a basket of major currencies, the dollar <.DXY> was
up 0.29 percent. The euro <EUR=> was down 0.44 percent at
$1.2195.
Government bond yields rose as appetite for safe-haven
assets weakened. Benchmark 10-year U.S. Treasury notes
<US10YT=RR> was down 5/32, with the yield at 3.3658 percent.
Gold <XAU=> fell 0.58 percent, to $1,215.80, but U.S. crude
oil futures <CLc1> rose 0.07 percent, to $72.91 per barrel.
(Additional reporting by Richard Leong)
