(Adds U.S. oil settlement, last New York gold prices)
* Oil jumps again to near $146 ahead of long U.S. weekend
* Dollar gains on ECB's soft outlook, mild U.S. jobs data
* Stocks climb as ECB, jobs data ease bearish sentiment
By Herbert Lash
NEW YORK, July 3 (Reuters) - Global stocks and the dollar
closed higher on Thursday after recent slides, as increasingly
bearish expectations for European rate rises and U.S.
employment were dashed by a dose of moderately favorable news.
Crude prices retreated from another all-time high of
$145.85 a barrel during the session, further helping sentiment
among equity investors. The rise in oil has been a key factor
pushing stocks into a bear market.
The Dow industrials earlier this week extended their
decline to the 20 percent level at which a market is considered
depressed; the more buoyant and broadly-based S&P 500 briefly
crossed the "bear" threshold during the day but then edged
higher at the close.
The euro fell and shares and euro zone government bonds
rallied after the European Central Bank snuffed speculation
that an aggressive interest rate policy was at hand.
The ECB raised its benchmark rate by one-quarter percentage
point to 4.25 percent, the major Western bank to raise interest
rates since the credit crisis erupted last August.
However, the ECB scaled back expectations of more hikes.
Trading was light but volatile in a shortened U.S. session
ahead of the long holiday weekend to mark America's
Independence Day on Friday.
A rally in super major oil companies and beaten-down
financial shares helped lift U.S. equities, as did a U.S. jobs
report for June that was not as weak as many feared.
ConocoPhillips and Chevron Corp <CVX.N> both rose about 1.2
percent, and Exxon Mobil Corp <XOM.N> rose almost 1 percent.
"The numbers weren't as bad as they could have been," said
Joe Saluzzi, co-manager of trading at Themis Trading in
Chatham, New Jersey. "Some people had feared 100,000 in job
losses or more."
The dollar's strength also buoyed sentiment as the price of
oil is priced in the U.S. currency, Saluzzi said.
Energy-related shares, including drillers, gas companies
and oil services, fell.
The Dow Jones industrial average <> rose 73.03 points,
or 0.65 percent, at 11,288.54. The Standard & Poor's 500 Index
<.SPX> added 1.38 points, or 0.11 percent, at 1,262.90. The
Nasdaq Composite Index <> fell 6.08 points, or 0.27
percent, at 2,245.38.
It was the fifth straight weekly loss for both the Nasdaq
and the Dow, and third weekly loss in a row for the S&P 500.
The tech-laden Nasdaq fell as semiconductor stocks suffered
after graphics chip maker Nvidia Corp <NVDA.O> cut its sales
and profit margin outlook, citing global market weakness.
Nvidia shares plunged 31 percent to close at $12.49, while
semiconductor stocks <.SOXX> slipped almost 1 percent.
In Europe, markets were taken by surprise when ECB
President Jean-Claude Trichet said he had "no bias" in terms of
monetary policy, remarks that investors interpreted as a sign
no more rate increases loomed.
Banking stocks rose as they usually benefit from periods of
steady or falling rates, pushing up BNP Paribas, Royal Bank of
Scotland and Societe Generale by more than 4 percent.
The FTSEurofirst 300 index <> of top European shares
closed up 0.87 percent at 1,178.04 points. The index swung
between losses of 1.6 percent and gains of 1.2 percent, marking
its most volatile day since late March.
"The vast majority of analysts were anticipating the
European Central Bank would have raised rates today," said Henk
Potts, a strategist at Barclays Stockbrokers.
"They also anticipated a very hawkish statement to come
through from that and it was certainly nowhere near as strong
as many had expected," he said.
Oil jumped. Some traders expected a weak U.S. dollar, lower
U.S. crude stocks and tension between Israel and major oil
producer Iran would push prices to $150 before the close of
trade, in line with a prediction made in early June.
Investment bank Morgan Stanley, one of Wall Street's
biggest energy traders, said crude could reach $150 by July 4.
The U.S. oil <CLc1> settled up $1.72 at $145.29 a barrel.
London Brent <LCOc1> settled at $146.08, up $1.82 after
reaching an intra-day record of $146.69 a barrel earlier.
"What is more concerning is it is very difficult to know
why it is going up. No one really knows the answer," said Colin
Morton with Rensburg Fund Management. "It seems to be about
momentum now. It's going up because it is going up."
The dollar rose broadly after expectations of the U.S. jobs
data and ECB rate stance were not excessively bearish.
The June payroll suggested the U.S. job market had not
deteriorated as much as many investors had feared, while
Trichet struck a more accommodative tone.
Demand for the dollar started to rise after the jobs report
for came in at a loss of 62,000 -- in line with expectations
and consistent with a mild recession. A much sharper decline in
payrolls would have triggered a sell-off in the U.S. currency.
The euro <EUR=> fell 1.16 percent at $1.5694. The dollar
rose against major currencies, with the U.S. Dollar Index
<.DXY> up 1.02 percent at 72.758. Against the yen, the dollar
<JPY=> rose 0.79 percent at 106.70.
Short-dated U.S. government debt prices edged up as weak
data reinforced a dour view of the U.S. economy and pared
expectations that the Federal Reserve will raise interest rates
any time soon.
The two-year U.S. Treasury note <US2YT=RR> added 3/32 to
yield 2.53, but longer-dated debt fell. The benchmark 10-year
U.S. Treasury note <US10YT=RR> slid 3/32 to yield at 3.97
percent and the 30-year U.S. Treasury bond <US30YT=RR> slipped
14/32 to yield 4.53 percent.
In fact, traders bet a steady rate policy by the Fed will
be inflationary down the road as food and oil prices continue
to advance in record territories. They dumped long-dated debt
in favor of less inflation-sensitive shorter maturities.
Gold retreated on the dollar's gains and Trichet's comments
that were less hawkish than expected.
Spot gold prices <XAU=> fell $11.65 to $932.70 by New
York's last quote.
Asian stocks fell, with Japanese stocks posting their
longest losing streak in a half century on heightened fears
that record high oil and stagflation will slam company earnings
and consumer spending.
Japan's Nikkei share index <> fell 11th consecutive
day, the longest period of daily declines since 1954.
The MSCI index of Asia-Pacific shares <.MSCIAPJ> traded
outside of Japan fell 1.4 percent to the lowest since a blowup
in the U.S. subprime mortgage sector turned into a global
credit crisis 10 months ago.
(Reporting by Walker Simon, Rebekah Kebede, Richard Leong and
Vivianne Rodrigues in New York and Amanda Cooper, Jan Harvey
and Raissa Kasolowsky in London)
(Reporting by Herbert Lash. Editing by Richard Satran)
