US jobs data helps stocks, euro off on Greece

Stocks rose on Thursday on signs of an improving U.S. job market, but worries that Greece’s talks with creditors were dragging pressured the euro lower and kept the advance in equities modest.

U.S. shares firmed as data showed new claims for U.S. unemployment benefits fell more than expected last week, pointing to more healing in the nation’s battered jobs market.

“The jobless claims continue the trend of decent news, though there have also been other indications of a general loss of momentum,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio. “That suggests we’re in the right ballpark with estimates for the jobs report, but also that we aren’t likely to see a huge upside surprise.”

U.S. non-farm payrolls data for January are due on Friday. Analysts in a Reuters survey forecast a rise of 150,000, slower than December as some holiday workers were laid off.

But caution around the euro zone sovereign debt crisis kept markets wary and trading choppy.
The European financial crisis still threatens the U.S. recovery, U.S. Federal Reserve Chairman Ben Bernanke said on Thursday.

Testifying before Congress, Bernanke said he was seeing signs that some of the uncertainty dampening U.S. business investment, including European banking woes, might be waning.

But he said it was far too soon to say whether the United States could remain unscathed.

And Luxembourg’s Jean-Claude Juncker, head of the euro zone finance ministers’ body known as the Eurogroup, said the outcome of this week’s European Union summit was “largely insufficient” when it came to tackling the sovereign debt crisis and described Greek debt talks as “ultra-difficult.

Athens is scrambling to wrap up talks on a 130-billion-euro rescue plan and a bond swap deal before big bond redemptions come due in March.

“The statement by Eurogroup chair Juncker that the Greek (private sector involvement) talks are ‘ultra difficult’ does not seem to suggest that they are ‘on the verge’ of a deal,” said David Watt, senior currency strategist at RBC Capital Markets in Toronto.

The Dow Jones industrial average gained 8.86 points, or 0.07 percent, to 12,725.32. The Standard & Poor’s 500 Index gained 3.85 points, or 0.29 percent, to 1,327.94. The Nasdaq Composite Index gained 16.51 points, or 0.58 percent, to 2,864.78.

The FTSEurofirst 300 index of top European shares rose 0.23 percent, trading near a six-month high hit earlier in the session.

The euro surrendered early gains to dip 0.2 percent to $1.3132 against the dollar. The single currency fell 0.25 percentto 100.01 yen against the Japanese currency.

The MSCI world equity index gained 0.3 percent to 321.75, having risen over seven percent for the year to date.
Debt sales by Spain and France, which resulted in lower bond yields, also fueled worries about waning demand for euro zone government debt.

Spain sold 4.56 billion euros of three-, four- and five-year government bonds while France also sold nearly 8.0 billion euros of debt, including a new 10-year bond with lower average yields compared with the previous sales.
“A reasonable set of results but certainly not the humdinger of an outcome as seen at the last two sets of auctions,” said Richard McGuire, rate strategist at Rabobank.

Brent crude oil inched higher on Thursday to $112.20 per barrel, but retreated from early gains, as a large build-up of oil stocks in top consumer the United States countered upbeat economic data globally.
But U.S. crude fell to $96.54 per barrel on inventory data and expectations of plentiful flows into a key U.S. refining hub.


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