* 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
(Updates with price moves)
By Barani Krishnan
NEW YORK, April 1 (Reuters) - The Dow industrials average
hit its highest since June 2008 on Friday, spurred by
encouraging U.S. jobs growth, even as a senior Fed official's
cautious view of the economy drove the dollar down against the
euro.
Oil prices hit their highest levels since September 2008,
and U.S. Treasuries rose, while safe-havens such as gold
slipped as appetite for risk grew.
The Dow Jones industrial average <> climbed above the
12,400 mark after the U.S. 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 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 14:57 (1823 GMT), the Dow was up 56.05 points, or 0.45
percent, at 12,375.78. The Standard & Poor's 500 Index <.SPX>
was up 6.49 points, or 0.49 percent, at 1,332.32. The Nasdaq
Composite Index <> was up 7.63 points, or 0.27 percent, at
2,788.70.
Global stocks, as measured by the MSCI All-Country World
Index <.MIWD00000PUS>, rose 0.7 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
maintained since the financial crisis or is looking to raise
interest rates.
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
stimulus 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 at its policy meeting next
Thursday.
The euro was around $1.4197 <EUR=> at midsession in New
York, up 0.2 percent, 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 0.04 percent
at 75.828.
OIL REBOUNDS
While many analysts said the U.S. job figures were
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>
settled up $1.22, or 1.14 percent, at $107.94 a barrel, its
highest close since September 2008.
TREASURIES RISE
U.S. Treasuries erased losses after the remarks by Dudley,
who also said the nation was still "very far away" from
achieving the Fed's 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 in price 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> finished down 0.7
percent at $1,428.10 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; Editing by Padraic
Cassidy)
