* Jobs data adds to view U.S. economy is gaining strength
* US dollar drops against euro, slips vs. currency basket
* Treasuries rebound; oil up in choppy trade
(Recasts and updates with price moves)
By Barani Krishnan
NEW YORK, April 1 (Reuters) - The Dow average hit its
highest since June 2008 on Friday, spurred by encouraging job
growth, even as a senior Fed official's cautious view of the
economy drove the dollar down against the euro.
The Dow Jones industrial average <> climbed above the
12,400 mark after the government reported a second straight
month of robust job gains in March.
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 []
"We are growing, we are getting more profitable, we are
going to see more jobs. That means consumers are going to do
better. That is the better picture to look at," said Marc
Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San
Francisco.
At 14:23 EDT (1823 GMT), the Dow was up 85.15 points, or
0.69 percent, at 12,404.88. The Standard & Poor's 500 Index
<.SPX> was up 10.14 points, or 0.76 percent, at 1,335.97. The
Nasdaq Composite Index <> was up 17.14 points, or 0.62
percent, at 2,798.31.
Global stocks, as measured by the MSCI All-Country World
Index <.MIWD00000PUS>, rose 0.92 percent.
The dollar fell against the euro after New York Federal
Reserve Bank President William Dudley suggested that economic
recovery was not looking as good as it did a month ago and
that too much should not be made of the latest employment
report.
Dudley, one of the central bank's key policymakers, also
signaled further support for quantitative easing,
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 looking to raise
interest rates soon.
Dudley said there was no reason to reverse course 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.
Another factor driving the dollar down versus the euro was
the belief that the European Central Bank will be the first
central bank to raise interest rates by doing just that at its
policy meeting next Thursday.
The euro was around $1.4225 <EUR=> at mid-session in New
York, up 0.23 percent for the day and well off the session low
of $1.4059. A trader said stop-loss orders between $1.4040 and
$1.4060, and the defense of an options barrier around $1.4060
had prompted buying as the euro approached those levels.
The dollar also dipped against a basket of major
currencies, with the U.S. Dollar Index <.DXY> off 0.05 percent
at 75.819.
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 for May <LCOK1> rose more than
$1 to a contract peak above $118 a barrel. U.S. crude <CLC1>
jumped to a 2-1/2-year peak near $108.
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.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
up 4/32 for the day, yielding 3.46 percent after being down
10/32 right after the employment report. U.S. federal fund
futures were slightly lower, with the January 2012 <FFF2>
contract down 3 ticks at 99.645.
Safe-haven gold slipped as the jobs data increased
investors' risk appetite. Spot gold <XAU=> , which tracks
trades in bullion, dropped 0.1 percent to trade above $1,428
an ounce, off its low at $1,412.55 hit earlier in the session.
U.S. gold futures for June delivery <GCM1> slid 0.7 percent at
$1,430 an ounce.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge
Fund Blog click on http://blogs.reuters.com/hedgehub)
(Additional reporting by Chuck Mikolajczak, Julie Haviv,
Ellen Freilich, Robert Gibbons and Frank Tang in New York;
Editing by Jan Paschal)
