* Global stocks trend up on U.S. jobs data optimism
* U.S. dollar gains versus euro, yen after jobs data
* Oil slips after passing $70 a barrel
* Government debt tumbles after jobs data boosts optimism
(Updates with U.S. markets activity; changes dateline,
previous LONDON)
By Herbert Lash
NEW YORK, June 5 (Reuters) - Global stocks edged higher and
the U.S. dollar gained against the euro and yen on Friday after
the pace of U.S. job losses slowed sharply in May, adding to
growing sentiment that the economic slowdown may be turning.
Equity and oil markets initially rose on the much
better-than-expected U.S. employment data. But after climbing
to more than $70 a barrel, crude prices see-sawed around
break-even as stocks traded slightly higher.
While U.S. employers cut 345,000 jobs last month -- the
fewest since September and far less than economists had
forecast -- unemployment hit its highest rate in nearly 26
years, a reminder that the economy is far from recovery.
"The unemployment numbers were great in that there were
fewer people losing their jobs, but the rate of unemployment
rose more than expected," said Phil Flynn, an analyst at Alaron
Trading in Chicago.
"That is disappointing for the market as it raises worries
about the long-term prospects in the job market," he said.
U.S. and euro zone government bonds sank on the surprise
drop in nonfarm payrolls and gold futures dropped more than 2
percent in heavy trading. Longer-dated euro zone debt tumbled
to the lowest level in nearly seven months
A sharply rebounding dollar weighed on commodity prices
such as copper. A strong U.S. currency makes metals priced in
dollars more expensive for holders of other currencies. []
"That has taken the shine off commodities," said Robin
Bhar, senior metals analyst at Calyon. "I suspect as the day
wears on, people will ask whether (the data) really was that
good."
A $15 billion stock buyback announced by Wal-Mart Stores
Inc <WMT.N> buoyed equity markets. Wal-Mart shares, up 0.7
percent to $51.21, gave the Dow Jones industrial average a
boost after the retailer announced that it authorized a $15
billion share repurchase plan.
"The sentiment implications are significant," said Michael
James, a senior trader at regional investment bank Wedbush
Morgan in Los Angeles.
"For one of the country's biggest companies to be
announcing a buyback of that magnitude I think is a
significant, positive expression about the strength of their
business and it sends a positive message to the market," James
said.
Shortly after 1:30 p.m., the Dow <> was up 46.86
points, or 0.54 percent, to 8,797.10. The Standard & Poor's 500
Index <.SPX> edged up 0.90 point, or 0.10 percent, to 943.36.
The Nasdaq Composite Index <> gained 1.84 points, or 0.10
percent, to 1,851.86.
European shares rose, led by miners, banks and oil
producers, as U.S. jobless data boosted sentiment.
The FTSEurofirst 300 <> index of top European
companies closed up 0.7 percent at 872.29 points, for a weekly
gain of about 1.2 percent.
The dollar's rise surprised some in the market because
strong economic data has generally been seen as a boost to
risk, leading the greenback to fall.
"The view here is that these better-than expected jobs
numbers should enable the United States to come out of
recession first, leading to a stronger dollar overall," said
Brian Dolan, chief currency strategist at Forex.com in
Bedminster, New Jersey.
U.S. light sweet crude oil <CLc1> rose 43 cents to $69.24 a
barrel.
Spot gold prices <XAU=> fell $15.10 to $964.00 an ounce.
U.S. Treasury debt prices were lower. The benchmark 10-year
U.S. Treasury note <US10YT=RR> fell 33/32 in price to yield
3.85 percent, while the 2-year U.S. Treasury note <US2YT=RR>
lost 18/32 in price to yield 1.24 percent.
The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 1.13 percent at 80.366.
The euro <EUR=> fell 1.19 percent at $1.4018, while against
the yen, the dollar <JPY=> was up 1.67 percent at 98.18.
Asian shares rose overnight, trading off positive signals
seen in Thursday's weekly U.S. jobless claims data. The MSCI
index of Asia-Pacific stocks outside Japan <.MIAPJ0000PUS> rose
0.8 percent.
(Reporting by Chuck Mikolajczak, Nick Olivari and Chris Reese
in New York; Dominic Lau, Christopher Johnson and Kirsten
Donovan in London; writing by Herbert Lash; Editing by Dan
Grebler)
