GLOBAL MARKETS-Stocks rise, cheered by jobless claims; euro up
* U.S. jobless claims fall bolsters risk appetite
* Euro rises from recent lows, equities higher
* Oil above $115 a barrel on Mideast tension
By Leah Schnurr
NEW YORK, Oct 11 (Reuters) - U.S stocks rose on Thursday after four days of losses, helped by further signs of improvement in the labor market in the world's largest economy, while the euro recovered some ground after the IMF said euro zone economies should have more time to cut budget deficits.
The events overshadowed a downgrade of Spain's credit rating by Standard & Poor's.
Escalating tensions between Syria and Turkey, as well as maintenance curbs on North Sea output, sent Brent crude oil above $115 a barrel.
Claims for U.S. jobless benefits fell last week to the lowest in more than four and a half years, in Labor Department data on Thursday that may provide a boost to President Barack Obama a month before voters go to the polls.
"We're starting to hear noise about companies hiring, and that's what the market is waiting for," said Jordan Waxman, managing director at Hightower Advisors in New York.
"Without labor market improvement, we can't get a sustainable rally. The numbers seem to be moving in the right direction."
The Dow Jones industrial average gained 23.35 points, or 0.17 percent, to 13,368.32. The Standard & Poor's 500 Index added 4.19 points, or 0.29 percent, to 1,436.75. The Nasdaq Composite Index was up 2.28 points, or 0.07 percent, at 3,054.07.
The FTSEurofirst 300 ended up 0.8 percent, while the MSCI global index gained 0.4 percent.
In the currency market, the euro was the primary beneficiary of improved sentiment, as it recovered from a more than one-week low. It was last at $1.2932, up 0.4 percent, rising for the first time in four days.
Christine Lagarde, the IMF's managing director, said she favored giving debt-burdened Greece and Spain more time to reduce their budget deficits because cutting too far and too fast would do more harm than good.
Lagarde's comments were seen supporting stability in the euro zone. One of the key debates to come from the euro zone's debt crisis is whether the steep cuts needed to get budgets in order come at the expense of economic growth.
Spanish bond yields turned lower, erasing an earlier spike to near the critical 6.0 percent mark seen as unsustainable after Standard & Poor's cut the country's credit rating.
S&P cut Spain's rating two notches to BBB-minus, one step from junk status, late Wednesday, warning that an intensifying recession and poor response from euro zone policymakers to the crisis had left Spain highly vulnerable.
Ten-year Spanish yields were down 4.4 basis points on the day at 5.78 percent, having hit a session high at 5.96 percent earlier.
Markets expect Spain to be the first of the euro zone's "big four" economies to require a rescue package.
"We are working on the assumption that Spain will make a request for aid and so the only uncertainty comes from pinning down exactly when that will occur," said Nick Matthews, Senior European economist at Nomura in London.
Tensions in the Middle East pushed Brent crude up $1.20 to $115.53 a barrel, while U.S. crude futures rose 90 cents to $92.15 per barrel.
Turkish Prime Minister Tayyip Erdogan said a Syrian passenger plane forced to land in Ankara was carrying Russian-made munitions destined for Syria's defense ministry.
The grounding of the plane was another sign of Ankara's growing assertiveness over the crisis in its war-torn neighbor.
On Wall Street, shares of Sprint Nextel Corp saw the heaviest action on the New York Stock Exchange after news that the firm was in talks over a potential sale to Japanese mobile carrier Softbank Corp.
Sprint was up nearly 12 percent.
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