* Global stocks gain as U.S. manufacturing data stirs hope
* Dollar slips on jobs data, but G20 limits losses
* Oil falls below $48 as U.S. inventories hit 16-year high
(Recasts with U.S. markets, changes dateline, previous
LONDON)
By Herbert Lash
NEW YORK, April 1 (Reuters) - Global stocks rose on
Wednesday after U.S. home sales and manufacturing data offered
investors a glimmer of hope that a deep recession was easing,
but oil fell as 16-year highs in U.S. crude inventories sent
the opposite message.
The U.S. dollar rose against the euro but was little
changed against the yen as caution before a Group of 20 summit
in London and a European Central Bank meeting blunted news of
more steep U.S. job losses last month.
Oil fell fell more than 4.0 percent at one point to below
$48, pressured by the bearish economic news and the surprising
rise in U.S. crude inventories.
Yields on shorter-dated euro zone government bonds fell to
their lowest in three weeks on the eve of a widely expected ECB
rate cut, but rising equity prices kept a lid on longer-dated
debt in Europe. [] U.S. government debt was mixed.
Financial shares turned around following the manufacturing
and homes data as investors bet an improvement in the economic
outlook will boost financial activity.
JPMorgan Chase <JPM.N> up 4.1 percent to $27.66 while Bank
of America <BAC.N> gained 3.8 percent to $7.08.
The contraction in U.S. factory activity slowed in March,
and U.S. construction spending fell at a slower-than-expected
rate in February, data that investors in equity markets took as
a sign recovery may be on the horizon.
Financial shares turned around following release of the
data on bets an improving economy will boost financial
activity. JPMorgan Chase <JPM.N> up 3.7 percent to $27.56 while
Bank of America <BAC.N> gained 3.5 percent to $7.06.
In Europe, Barclays <BARC.L> rose 6.1 percent, Credit
Suisse <CSGN.VX> gained 5.9 percent and BNP Paribas <BNPP.PA>
added 5.5 percent. ING <ING.AS> rose 8.4 percent.
A slightly better-than-expected reading of 36.3 in the U.S.
Institute for Supply Management index sparked a turnaround in
European markets. A reading below 50 indicates contraction.
"It is still below 50 but it is very positive," said
Heinz-Gerd Sonnenschein, equity strategist at Postbank in Bonn,
Germany.
"It is good news after the bad news that already came in,"
Sonnenschein said, referring to the ADP private sector jobs
report that shows 742,000 positions were cut in March.
Jeffrey Saut, chief investment strategist at Raymond James
Financial in St Petersburg, Florida, said the jobs number was
"somewhat" encouraging.
It's not a major improvement but it feels ... that the rate
of decline is diminishing," Saut said.
Before 1 p.m. New York time (1700 GMT), the Dow Jones
industrial average <> was up 108.00 points, or 1.42
percent, at 7,716.92. The Standard & Poor's 500 Index <.SPX>
was up 9.02 points, or 1.13 percent, at 806.89. The Nasdaq
Composite Index <> was up 17.05 points, or 1.12 percent,
at 1,545.64.
The FTSEurofirst 300 <> index of top European shares
closed 1.6 percent higher at 745.14 points.
Oil prices fell after the U.S. Energy Information
Administration reported a 2.8 million barrel rise in crude oil
inventories. Gasoline stockpiles increased by 2.2 million
barrels, counter to forecasts of a 1.4 million-barrel
decline.[]
"There is no indication in these numbers that the economy
is strengthening. It looks like more of the same," said Joseph
Arsenio, managing director at Arsenio Capital Management in
Larkspur, California.
U.S. light sweet crude oil <CLc1> fell $1.95 to $47.71 a
barrel.
The dollar was up against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 0.17 percent at 85.658.
The euro <EUR=> was down 0.27 percent at $1.3214. Against
the yen, the dollar <JPY=> rose 0.03 percent at 98.87.
Jessica Hoversen, a currency analyst at MF Global in
Chicago, called ADP "a really bad number" that bodes ill for
the government's more comprehensive jobs report on Friday.
But she said the G20 meeting and an expected ECB interest
rate cut on Thursday "will keep a lid" on price action.
The ECB is expected to cut interest rates to 1 percent on
Thursday. Markets are on alert for any sign officials are
moving toward unconventional policy measures such as buying
corporate or government debt to boost the money supply.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
unchanged in price to yield at 2.67 percent. The 2-year U.S.
Treasury note <US2YT=RR> fell 2/32 in price to yield 0.83
percent.
Japan's Nikkei average <> surged 3 percent but other
Asian stocks started the quarter more cautiously. The MSCI
index of Asia-Pacific stocks outside Japan <.MIAPJ0000PUS>
pared bigger gains to trade up 0.6 percent.
(Reporting by Leah Schnurr, Steven C. Johnson, Ellen Freilich
in New York and Chris Baldwin, Emelia Sithole-Matarise in
London and Peter Starck in Frankfurt; writing by Herbert Lash)
