* US indexes drop on unexpected rise in jobless claims
* Euro gains on Spain, Greece progress in deficit-cutting
* FTSEurofirst 300 moves in sympathy with US markets
(Recasts lead; changes byline, dateline, previous London)
By Jennifer Ablan and Jeremy Gaunt
NEW YORK/LONDON, Aug 5 (Reuters) - U.S. stocks dropped on
Thursday after an unexpected rise in weekly jobless claims
underscored the weak economy, while the euro gained on a
successful Spanish debt auction.
Prices of U.S. Treasuries rose as the number of Americans
making new claims for jobless benefits rose by 19,000 to
479,000 in the week ended July 31 -- the highest level in
nearly four months. It was also above forecasts of 455,000
versus 460,000 in the prior week. For details, see
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Concern over persistently high unemployment and the fragile
state of the global economy is running high ahead of Friday's
nonfarm payrolls data.
The jobless claims report is "a big disappointment, and
that doesn't bode well for tomorrow," said Dan Cook, senior
market analyst at IG Markets in Chicago.
In morning New York trading, benchmark indexes were down.
The Dow Jones industrial average <> dipped 47.30
points, or 0.44 percent, to 10,633.13. The Standard & Poor's
500 Index <.SPX> dropped 6.15 points, or 0.55 percent, to
1,121.09. The Nasdaq Composite Index <> shed dropped 16.91
points, or 0.73 percent, to 2,286.66.
Global equities measured by the MSCI All-Country World
Index <.MIWD00000PUS> turned flat on the U.S. data, off 0.1
percent, while the Thomson Reuters global stock index
<.TRXFLDGLPU> dipped 0.04 percent.
For their part, European shares dropped in afternoon trade,
moving in sympathy with Wall Street. The pan-European
FTSEurofirst 300 index of top shares <> was down 0.2
percent at 1,068.48 points, slipping from three-month highs hit
earlier in the session.
Japan's Nikkei <> closed up 1.7 percent, helped by top
carmaker Toyota Motor Corp <7203.T><TM.N>, which reported its
best operating profit in two years.
EURO GETS SUMMER LOVE
The euro rose on Thursday, boosted by solid German
industrial data and signs that Spain and Greece were making
progress in trimming budget deficits.
The euro rose <EUR=> to $1.3217, up about half a percent on
the day, while the dollar was off 0.5 percent at 85.85 yen.
<JPY=>
The currency also got a lift after European Central Bank
President Jean-Claude Trichet said incoming economic data for
the third quarter showed stronger-than-expected euro zone
growth. The ECB held interest rates at 1 percent as expected.
[]
Trichet "sounded quite positive and constructive," said
Sacha Tihanyi, strategist at Scotia Capital in Toronto, and
that has added to a prevailing market tendency to buy euros.
A senior International Monetary Fund official told Reuters
that Greece would receive a second tranche of international aid
after an impressive start on its austerity plan, and that it
must now shift to drastic reforms to return to growth.
[]
Also Thursday, Spain sold 3.5 billion euros in three-year
bonds at a lower yield than a previous auction in June,
suggesting solid demand as it copes with fiscal problems.
[]
Conversely, the dollar was down against a basket of major
trading-partner currencies, with the U.S. Dollar Index <.DXY>
off 0.04 percent at 80.863 from a previous session close of
80.892.
U.S. Treasury debt prices were higher. The benchmark
10-year U.S. Treasury note <US10YT=RR> added 8/32, with the
yield at 2.93 percent. The 2-year U.S. Treasury note <US2YT=RR>
was up 1/32, with the yield at 0.55 percent. At the longer end
of the curve, the 30-year U.S. Treasury bond <US30YT=RR> gained
16/32, with the yield at 4.06 percent.
In energy and commodities prices, U.S. light sweet crude
oil futures <CLc1> fell 51 cents, or 0.6 percent, to $81.96 per
barrel, and spot gold prices <XAU=> dropped $2.80, or 0.23
percent, to $1192.40. The Reuters/Jefferies CRB Index <.CRB>
was down 0.05 points, or 0.02 percent, at 278.93.
(Additional reporting by Jeremy Gaunt in London and Steven C.
Johnson in New York; editing by Jeffrey Benkoe)
