NEW YORK (Reuters) - Global stocks gained on Thursday on an improving U.S. jobs picture and data that showed China's economy regaining some traction, while U.S. crude futures were supported by the economic news and potential storm-related supply disruptions.
Widespread power outages and navigational hazards caused by Hurricane Sandy continued to threaten fuel and crude oil deliveries around New York City, including the harbor delivery point on which New York Mercantile Exchange fuel futures contracts are based.
Payrolls processor ADP reported that private employers added jobs in October at the fastest pace in eight months, a sign of modest healing in the U.S. labor market.
Other data showed a sharp improvement in consumer confidence even as the ADP reading did not change the view that the jobs market still faces a long slog back to health.
A drop in new claims for jobless benefits last week helped lift sentiment ahead of nonfarm payrolls due on Friday, and there were mixed signals about the health of U.S. manufacturing.
Still, there was renewed optimism about China, the world's growth engine, after official and private-sector factory surveys marked gains. China's official Purchasing Managers Index for October showed rising factory activity for the first time since July.
"There is a general trend of things getting more positive, which should help stocks and the economy at large going forward," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
U.S. stocks advanced in a broad rally, with the three major gauges of activity on Wall Street rising more than 1 percent. The benchmark S&P 500 scored its best day in seven weeks.
The Dow Jones industrial average .DJI closed up 136.16 points, or 1.04 percent, at 13,232.62. The Standard & Poor's 500 Index .SPX rose 15.43 points, or 1.09 percent, at 1,427.59. The Nasdaq Composite Index .IXIC added 42.83 points, or 1.44 percent, at 3,020.06.
In Europe, the FTSE Eurofirst .FTEU3 index of top European shares closed up 1.2 percent at 1,109.99.
The pick-up in Chinese activity increased the appetite for European automakers, with the one sector index .SXAP up 1.74 percent and BMW .BMWG.DE up 3 percent.
MSCI's all-country world equity index .MIWD0000PUS gained 0.8 percent to 331.85.
U.S. Treasuries prices fell on news of the Chinese PMI manufacturing surveys, while China's central bank also conducted its largest-ever net fund injection this week.
The central bank's move signaled its intention to keep money market conditions relatively loose and support lending to the real economy before a once-in-a-decade political transition, starting on November 8 at the 18th Party Congress.
"The main reason Treasuries were down is that the Chinese central bank continues to inject record levels of liquidity into the market and the China PMI was better than expected," said Steven Van Order, fixed-income strategist at Calvert Investment Management in Bethesda, Maryland.
The benchmark 10-year U.S. Treasury note was down 8/32 in price to yield 1.7207 percent.
The euro surrendered gains against the dollar after a Greek court ruled the country's pension reform demanded by foreign lenders may be unconstitutional, stoking worries about Athens' ability to implement austerity measures needed to secure aid.
The euro was down 0.15 percent at $1.2939.
U.S. crude inventories fell 2.05 million barrels, instead of the expected build of 1.5 million barrels, the U.S. Energy Information Administration said in its weekly report, which was delayed a day because of Sandy. <EIA/S>
"We saw that draw on crude and that helped put a bid in the market. I think the market found some support earlier from the employment number that had come out and the consumer confidence numbers," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
The destruction wrought by the storm affected millions of people across the eastern United States and could dampen fuel demand just as the world's largest economy was showing signs of recovery, analysts said.
U.S. December crude rose 85 cents to settle at $87.09 a barrel. In London, the Brent crude contract for December fell 53 cents to settle at $108.17 a barrel.
(Additional reporting by Marc Jones in London; Editing by Leslie Adler, Andrew Hay and Dan Grebler)