* Strong Cisco results drive up technology shares
* Prices of gold, oil retreat as U.S. dollar steadies
* Short Treasuries up on inflation outlook, bonds down
(Updates with U.S. markets close)
By Walter Brandimarte
NEW YORK, Nov 5 (Reuters) - U.S. and European stocks jumped
and the dollar steadied on Thursday after better-than-expected
U.S. jobs data bolstered investor confidence in the global
economy, causing gold prices to retreat from all time-highs.
The number of U.S. workers filing new claims for jobless
benefits fell more than expected last week to a 10-month low,
while worker productivity surged at a 9.5 percent annual rate,
improving the outlook for both the economy and inflation.
The more stable dollar put a damper on commodity prices in
general. U.S. crude oil prices dropped as much as $1 per
barrel, snapping a three-day rally, as investors adopted a
cautious tone before Friday's key U.S. employment report.
Short-dated U.S. Treasury prices rose on the benign
inflation outlook, which resonated with the U.S. Federal
Reserve's pledge a day earlier to keep interest rates low for
"an extended period."
Long-dated Treasury prices fell, however, on concerns about
upcoming supply of bonds and as the positive news on the
economy curbed the safe-haven bid for government debt.
Wall Street stock indexes closed about 2 percent higher,
with the Dow closing about 10,000 for the the first time in two
weeks.
The surprising drop in new claims for U.S. jobless benefits
helped, and created "some anticipation that maybe tomorrow's
employment report may be better than expected," said Peter
Jankovskis, co-chief investment officer at OakBrook Investments
LLC in Lisle, Illinois.
Subodh Kumar, chief investment strategist at Subodh Kumar &
Associates in Toronto warned that Friday's key monthly U.S.
employment report will be the real test for markets.
"Unemployment is already close to 10 percent, but if it
comes out at 10 or above, then there will be worries that the
consumers are not there for spending, and that will hurt the
market," he said.
Wall Street was also supported by a rally in technology
shares after Cisco Systems Inc <CSCO.O>, the network equipment
maker, posted a stronger-than-expected quarterly profit.
[]
The Dow Jones industrial average <> ended up 203.82
points, or 2.08 percent, at 10,005.96, while the Standard &
Poor's 500 Index <.SPX> climbed 20.13 points, or 1.92 percent,
to 1,066.63. The Nasdaq Composite Index <> rose 49.80
points, or 2.42 percent, to 2,105.32.
MSCI's all-country world stock index <.MIWD00000PUS> rose
0.8 percent while the pan-European FTSEurofirst <> ended
up 0.6 percent at 990.53 points -- its highest close since Oct.
29.
Retailers were among the top gainers in Europe, led by the
Belgian group Delhaize <DELB.BR>, which rose 5 percent after
hiking its 2009 operating profit forecast.
"Everybody was cautious in the last few days, but the
macro-economic data gave the market a little push," said
Giuseppe-Guido Amato, strategist at Lang & Schwarz. "We see a
good support here."
Emerging market stocks gained 0.49 percent according to a
benchmark MSCI index <.MSCIEF>.
Japan's Nikkei <> closed down 1.3 percent, though,
before the release of the weekly U.S. jobless claims data.
Renewed economic hopes also allowed the U.S. dollar to edge
0.1 percent higher against a basket of major currencies
<.DXY>.
The euro <EUR=> was unchanged against the greenback at
$1.4876, erasing initial gains that had been fueled by an
optimistic growth forecast for the eurozone delivered by
European Central Bank President Jean-Claude Trichet.
[]
Against the Japanese yen, the dollar <JPY=> was up 0.06
percent at 90.73.
GOLD OFF HIGHS, OIL LOWER
The dollar's modest gains helped halt a series of increases
in commodity prices.
U.S. crude oil prices <CLc1> fell 78 cents, or 0.97
percent, to settle at $79.62 a barrel, while spot gold prices
<XAU=> fell $1.55, or 0.14 percent, to $1,090.60.
Gold prices reached an all-time high of $1,097.25 an ounce
on Wednesday, and investors decided to pocket part of the gains
after the metal failed to breach the psychological level of
$1,100.
"The fact that we didn't manage to go through $1,100 might
lead some investors to reconsider their positioning in the
sector," said Commerzbank analyst Eugen Weinberg.
The Reuters/Jefferies CRB Index <.CRB> was down 2.64
points, or 0.95 percent, at 274.30.
Benchmark 10-year U.S. Treasury notes <US10YT=RR> were down
3/32, with the yield at 3.5293 percent, while 2-year notes
<US2YT=RR> were up 1/32, with the yield at 0.8805 percent.
The 30-year U.S. Treasury bond <US30YT=RR> was down 5/32,
with the yield at 4.4031 percent.
(Additional reporting by Angela Moon, Jan Harvey, Ellen
Freilich, Wanfeng Zhou; Editing by Leslie Adler)
