* Jobs data adds to view U.S. economy is gaining strength
* US dollar firms vs major currencies, down against euro
* Treasuries rebound; oil up in choppy trade
(Recasts and updates with price moves)
By Barani Krishnan
NEW YORK, April 1 (Reuters) - U.S. blue chip stocks opened
the second quarter on Friday by hitting their highest level
since June 2008 as investor optimism rose after an upbeat U.S.
employment report.
The Dow Jones industrial average <> climbed above the
12,400 mark on views the U.S. economy is on a solid recovery
track.
The government reported a second straight month of solid
job gains in March and a slight drop in the unemployment rate
to a 2-year low.
The dollar initially rose against the euro after the report
but turned negative after a senior Federal Reserve official
cautioned against views the March job numbers might cause the
Fed to reverse course.
A total of 216,000 nonfarm U.S. jobs were added in March,
well above the 190,000 expected in a Reuters poll, and January
and February figures were revised to show 7,000 more jobs than
previously reported. The unemployment rate fell to a two-year
low of 8.8 percent. For details, see []
Analysts said the data signaled that recovery in the
world's largest economy remained firmly on track.
"It's hard to argue with the case that we have further to
go in this bull market economic recovery cycle," said Hugh
Johnson, chief investment officer of Hugh Johnson Advisors LLC
in Albany, New York.
Around 1 p.m. EDT (1700 GMT), the Dow Jones industrial
average <> was up 83.67 points, or 0.68 percent, The
Standard & Poor's 500 Index <.SPX> was up 9.92 points, or 0.75
percent, at 1,335.75. The Nasdaq Composite Index <> was up
16.76 points, or 0.60 percent, at 2,797.83.
Global stocks, as measured by the MSCI All-Country World
Index <.MIWD00000PUS>, rose 0.92 percent.
The improving jobs picture initially helped the U.S. dollar
gain against a basket of major currencies <.DXY >, as well as
the euro <EUR=>. The dollar stayed at 0.16 percent above other
majors. But the euro rebounded by midday and was up 0.2 percent
versus the greenback, trading above $1.4190.
New York Federal Reserve Bank President William Dudley said
economic recovery was not looking as good as a month ago, and
while jobs numbers were encouraging, he did not want to
overstate the growth.
Markets have been getting mixed signals from various Fed
officials over the past two weeks on growth and whether the
central bank is keen to keep the easy monetary policy it has
maintained since the financial crisis or is looking to raise
interest rates soon.
"I would be surprised if we didn't finish the full QE2,"
Dudley said, referring to the central bank's $600 billion
buying program, which some other Fed officials have indicated
could be ended prematurely.
OIL REBOUNDS
While many analysts viewed the U.S. job figures as
encouraging, some expressed concern that rising energy and
commodity prices could squeeze investments in business
expansion, threatening the employment outlook.
"One has to wonder whether we'll see the pace of hiring
slow as a result," said Bernard Baumohl, chief global economist
at the Economic Outlook Group in Princeton, New Jersey.
London Brent crude futures rose more than $1 per barrel to
$118.03 a barrel by 12:33 p.m EDT (1633 GMT) in choppy trading,
after the jobs report. Brent had risen 2.0 percent on Thursday,
hitting 2-1/2 year highs.
U.S. copper's benchmark contract May <HGK1> was down 1.2
percent at $4.2580 a lb.
TREASURIES RISE
U.S. Treasuries erased early losses after the remarks by
Dudley, who also said the nation was still "very far away" from
achieving the dual mandate of maximum sustainable employment
and price stability.
"One side of the Fed's mandate, falling unemployment, is
saying exit. The other side of their mandate, low core
inflation, is saying not so fast," said Chris Rupkey, chief
financial economist at Bank of Tokyo/Mitsubishi UFJ in New
York.
Benchmark 10-year Treasury notes were unchanged on the day,
yielding 3.47 percent after being down 10/32 right after the
employment report. U.S. federal fund futures were slightly
lower, with the January 2012 contract down 3 ticks at 99.645.
Safe-haven gold <XAU=> slipped as the jobs data boosted
investors' risk appetite. Spot gold, which tracks trades in
bullion, dropped 0.9 percent to $1,425.25 an ounce, off its low
at $1,412.55 hit earlier in the session. U.S. gold futures for
June delivery <GCM1> fell 1 percent to $1,425.70.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
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(Editing by Dan Grebler)
