* Euro rebounds versus U.S. dollar on ECB bond-buying talk
* Global stocks rally on signs of stronger economic growth
* Oil prices gain on weak dollar, upbeat U.S. data
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, Dec 2 (Reuters) - The euro rebounded against the
U.S. dollar on Thursday and global stocks rallied as talk that
the European Central Bank had increased its buying of sovereign
debt and recent upbeat economic data lifted sentiment.
Wall Street posted its biggest two-day gain since September
and crude oil ended the session at its highest level in 25
months as concerns about the European debt crisis eased and a
weaker dollar prompted investors to buy riskier assets.
Investors also cheered upbeat U.S. data on retail sales and
housing, the latest signs that the recovery was in fuller
swing. Copper notched its largest three-day gain since July.
Disappointment that ECB President Jean-Claude Trichet did
not announce a more aggressive policy response to ease the debt
crisis initially weakened stocks and the euro. But traders said
the ECB was buying Portuguese and Irish debt at a modestly
higher rate than of late, bolstering sentiment.
U.S. gold futures were on the verge of breaking above
$1,400 an ounce, but safe-haven buying faded after the ECB
offered a liquidity safety net for vulnerable banks and the
U.S. data pointed to an improving economy.
Bank stocks led the rally on Wall Street after Goldman
Sachs said improving economic conditions will favor that
sector. For details, see []
The KBW bank index <.BKX> shot up 3.9 percent. The S&P 500
financial index <.GSPF> rose 2.6 percent, making it the largest
gainer among S&P sectors. The S&P 500 retail index <.RLX> rose
1.8 percent.
"The fears had been centered on Europe. That seems to have
stabilized," said Mark Bronzo, portfolio manager at Rydex-SGI
in Irvington, New York. "Now the focus is on what domestic and
international growth will look like. People are betting that
growth will be better than people had feared."
The Dow Jones industrial average <> was up 106.63
points, or 0.95 percent, at 11,362.41. The Standard & Poor's
500 Index <.SPX> was up 15.46 points, or 1.28 percent, at
1,221.53. The Nasdaq Composite Index <> was up 29.92
points, or 1.17 percent, at 2,579.35.
Stocks in Tokyo were poised to open slightly lower, with
the December futures contract that trades in Chicago for the
Nikkei 225 <0#NK:> off 5 points at 10,315.
With the ECB's meeting concluded, traders shifted their
focus to U.S. labor market data due on Friday. The government
is expected to report that nonfarm payrolls rose 140,000 last
month, according to a Reuters survey.
Marc Chandler, global head of currency strategy at Brown
Brothers Harriman in New York, said there does not seem to be
any reason not to look for a relatively robust jobs report.
The string of data for the past several weeks has been not
only better than expected but also suggested some modest
acceleration of the U.S. economy, he wrote.
"There is some risk that the work week and hourly earnings,
important elements of the report, may not show the same
improvement as the job creation, but on balance a strong U.S.
jobs report is likely," Chandler said.
Oil prices rose in anticipation of strong demand ahead.
U.S. crude for January delivery <CLc1> settled up $1.25, or
1.44 percent, at $88 a barrel, the highest since October 2008.
In London, ICE January Brent crude <LC0c1> ended $1.82
higher, or 2.05 percent, at $90.69, also the highest since
October 2008.
February gold futures <GCG1> settled up $1 at $1,389.30 an
ounce in New York, after hitting $1,399.70 -- a three-week
high.
U.S. Treasury debt prices fell, with benchmark yields
hovering at 3 percent for a second day, as traders awaited the
U.S. jobs report on Friday.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 9/32 in price to yield a hair under 3.0 percent.
"The market is recalibrating itself for a higher level of
growth," said Mark Pawlak, market strategist at Keefe, Bruyette
& Woods in New York.
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.63 percent at 80.205.
Against the Japanese yen, the dollar <JPY=> was down 0.40
percent at 83.85.
(Reporting by Gertrude Chavez-Dreyfuss, Wanfeng Zhou, Richard
Leong in New York; Kirsten Donovan, Atul Prakash in London;
Writing by Herbert Lash; Editing by Kenneth Barry)
