* US jobless claims at lowest in over 2 years, spending up
* Risk appetite drives US stocks up 1 pct, Treasuries down
* Portugal, Spain spreads widen as Irish tension spreads
(Updates with European markets' close)
By Walter Brandimarte
NEW YORK, Nov 24 (Reuters) - Stocks rebounded while the
euro cut losses on Wednesday after stronger-than-expected U.S.
jobs and consumer sentiment data eclipsed lingering concerns
about the European debt crisis.
Prices of U.S. Treasuries and gold dropped as investors
felt more comfortable taking on risk one day after rising
tensions in the Korea peninsula jolted global markets.
The relief came after data showed claims for U.S.
unemployment benefits last week dropped to their lowest level
in more than two years. Consumer sentiment also rose to its
highest since June. For details, see [].
"Now you are getting good economic data, and you have a tug
of war going on here between an improving economy and
geopolitical events," said Paul Mendelsohn, chief investment
strategist at Windham Financial Services in Charlotte, Vermont.
"The market is trying to determine how much weight to put on
each one of these events."
Fears that the Irish debt crisis could spread into weaker
members of the euro zone also inspired caution, with yield
spreads of Portuguese and Spanish debt widening to fresh
records even as Ireland unveiled a much-awaited austerity
plan.
The 15 billion euro ($20 billion) plan for the next four
years includes deep spending cuts and tax increases while
retaining economic assumptions that many analysts deem
unrealistic. []
"There are still a lot of questions surrounding the bailout
of Ireland and the budget; the government is in a limbo and we
do not know if it will go through," said Franz Wenzel,
strategist with AXA Investment Managers in Paris.
Major U.S. stock indexes gained more than 1 percent as
investors put Europe's worries on the back burner.
The Dow Jones industrial average <> rose 135.32 points,
or 1.23 percent, to 11,171.69, while the Standard & Poor's 500
Index <.SPX> gained 15.59 points, or 1.32 percent, to 1,196.32.
The Nasdaq Composite Index <> was up 47.16 points, or 1.89
percent, at 2,542.11.
MSCI's All-Country World Index <.MIWD00000PUS> climbed 0.74
percent, while Europe's FTSEurofirst 300 <> index of top
shares rebounded from six-weeks lows to close 1.02 percent
higher at 1,087.67.
The European stock market was also supported by data
showing German business sentiment rose in November to its
strongest since 1991.
DOLLAR WEAKENS
The U.S. dollar weakened along with other safe-haven
assets, but trading was thin on the eve of the U.S.
Thanksgiving holiday when U.S. financial markets will be
closed.
The U.S. Dollar Index <.DXY>, which measures the
performance of the greenback against a basket of major
currencies, was down 0.07 percent.
The euro <EUR=> was practically flat at $1.3361 as concerns
about the European debt crisis continued to weigh.
U.S. Treasury prices fell as stocks took the appeal off the
government debt market. Prices of benchmark 10-year notes
<US10YT=RR> were down more than one point, sending the yield up
to 2.9047 percent.
Gold prices <XAU=> fell $3.15 to $1,373.60 an ounce. U.S.
crude oil prices <CLc1> rose $2.42, or nearly 3 percent, to
$83.67 per barrel as larger-than-expected declines in U.S.
supply provided support to the market.
(Additional reporting by William James, Chuck Mikolajczak,
Chris Reese and Julie Haviv; Editing by Kenneth Barry)
