* U.S. shares little changed after fall in jobless claims
* World stocks rise off 7-wk lows after European earnings
* Euro rises with global shares
By Dena Aubin
NEW YORK, Aug 26 (Reuters) - World stocks bounced off
seven-week lows after strong European earnings on Thursday, but
U.S. shares were little changed as better-than-expected jobs
data failed to quell fears about the struggling labor market.
The euro rose with the advance in global equities, while
crude oil prices advanced more than 1 percent after initial
claims for U.S. jobless benefits fell more than expected. The
weaker dollar also supported oil prices.
Most financial markets remained in a holding pattern ahead
of a speech by Federal Reserve Chairman Ben Bernanke on Friday.
Bernanke, who will speak at an annual Fed meeting in Jackson
Hole, Wyoming, is likely to signal his views about prospects
for the U.S. economy, though he may not offer clues on whether
the Fed will try to shore up growth with another round of cash
injections.
"Labor market weakness remains the primary concern in the
economy," said Dana Saporta, economist at Credit Suisse.
"That's something that Bernanke has to address at his Jackson
Hole speech tomorrow."
The Dow Jones industrial average <> fell 11 points, or
0.11 percent, to 10,049. The Standard & Poor's 500 Index <.SPX>
was nearly steady at 1055.32, down 0.01 point. The Nasdaq
Composite Index <> fell 3.31 points, or 0.15 percent, at
2,138.23.
"We want more people to be finding jobs, and the claims
data is a good sign for that, but this isn't something you can
stick your hat on and think everything is better," said Anthony
Halpin, investment adviser at Chicago Partners Investment Group
LLC in Chicago.
Elsewhere, the global picture was helped along by strong
corporate earnings in Europe.
MSCI's main gauge of global equities <.MIWD00000PUS> was up
0.6 percent after hitting its lowest level since July 7 on
Wednesday. The Thomson Reuters global stock index <.TRXFLDGLPU>
was 0.4 percent higher.
The FTSEurofirst 300 <> index of top European shares
closed 0.9 percent higher at 1,020.27 points after rising as
high as 1,023.23 earlier in the day and hitting a five-week
closing low in the previous session.
French bank Credit Agricole <CAGR.PA> rose 2.7 percent on
an 89 percent rise in second-quarter net profit, miner
Kazakhmys <KAZ.L> gained 5.2 percent after its underlying
first-half earnings per share jumped 130 percent and French
hotel group Accor <ACCP.PA> rose 3.9 percent on doubling of
core profit.
"Companies have been reporting reasonable results," said
David Buik, partner at BGC Partners. "But whether a rally can
be sustained is to be seen. There is nothing to say the bad
news is all over."
With only a few companies left to report for the second
quarter, Thomson Reuters Proprietary Research shows U.S. S&P
500 <.SPX> had average earnings growth of 38.4 percent in the
recent reporting season.
Markets have been balancing good corporate profit results
with signs that growth in the U.S. economy is slowing.
EURO RISES
U.S. Treasuries were little changed on Thursday after the
jobless claims data showed the labor market was not as weak as
had been feared, driving bonds to give up earlier gains.
But the data left unresolved the debate over whether bonds
are overpriced, or if the faltering U.S. recovery will underpin
U.S. government debt until economic indicators begin to improve
consistently, particularly the hard-hit labor market.
The 30-year long bond <US30YT=RR> was last up 10/32 in
price, yielding 3.56 percent, versus Wednesday's close of 3.57
percent.
Analysts say resistance lies at 3.51 percent and support at
3.82 percent.
The benchmark 10-year note <US10YT=RR> was up 3/32 in
price, yielding 2.53 percent versus Wednesday's close of 2.54
percent.
In currency markets, a rally in safe-haven currencies such
as the yen and the Swiss franc stalled as global equities
stabilized and investors braced for Bernanke's speech on
Friday.
"The latest data, though erratic week-to-week, plays to the
camp that the trends in the labor market will not put as much
pressure on the Fed Chairman to display a dovish line" in his
speech on Friday, " said Alan Ruskin, global head of G10 FX
strategy at Deutsche Bank AG.
The euro rose along with global share prices, but gains
were capped after a recent string of weak U.S. economic data
suggested the pace of recovery was slowing.
The yen was flat to weaker but away from multi-year highs
against the dollar and the euro, as investors speculated on
whether Bank of Japan Governor Masaaki Shirakawa will comment
on the yen or monetary policy at the Federal Reserve retreat in
Jackson Hole.
The dollar index, a gauge of the greenback's performance
against a basket of six major currencies, fell 0.3 percent to
82.977 <.DXY>. It hit 83.556 on Tuesday, a six-week high.
The euro <EUR=> rose around 0.2 percent on the day to
$1.2690.
Oil rose after the positive jobless claims reading improved
sentiment and helped spur bargain-hunting. Benchmark U.S.
crude futures for October <CLc1> traded at $73.42, up 90 cents
per barrel.
(Additional reporting by Ryan Vlastelica and Vivianne
Rodrigues in New York, and Jeremy Gaunt, Naomi Tajitsu, Joanne
Frearson and Christopher Johnson in London; Editing by Leslie
Adler)
