GLOBAL MARKETS-Stocks, dollar up modestly after strong jobs data

Fri Dec 7, 2012 3:40pm EST

* Wall St mostly up as consumer sentiment data offsets jobs

* World and European equities inch up

* Euro pares losses vs dollar; oil and bond prices slip

By Leah Schnurr

NEW YORK, Dec 7 (Reuters) - Global shares rose modestly on Friday after a surprisingly strong U.S. jobs report for November was tempered by a drop in American consumer sentiment amid a lack of progress in talks to avert the "fiscal cliff."

The dollar edged up though the currency was off its highs as investors parsed the details of the labor market report, one of the most closely watched economic indicators.

U.S. non-farm payrolls added 146,000 jobs last month, data showed, defying expectations of a sharp pullback related to Superstorm Sandy that hit the U.S. Northeast in late October.

"The gain was sharper than expected, particularly in light of the hurricane, so certainly that was a pleasant surprise. We'll take it," said Gordon Charlop, managing director at Rosenblatt Securities in New York.

"We will just have to see overall how much of an effect one number can have on what is really a market that is pointing toward Washington and 'fiscal cliff' negotiations," he added.

Uncertainty over whether U.S. lawmakers will agree on a deal to avert spending cuts and tax increases was likely to continue to keep investors on edge. Any signs of how the talks are progressing could cause more fluctuations in the markets.

Republican House Speaker John Boehner accused U.S. President Barack Obama of pushing the country toward the fiscal cliff and wasting another week without progress in talks.

"There's total uncertainty with what's going to transpire here and abroad. Too many questions," said Warren West, principal at Greentree Brokerage Services in Philadelphia.

Wall Street was mostly higher by the late afternoon after data showed anxiety over the pending higher taxes likely soured consumers' attitudes in early December.

The Nasdaq fared worse than the other major indexes, weighed down again by shares of Apple, off 2.9 percent at $531.35.

The Dow Jones industrial average gained 63.02 points, or 0.48 percent, to 13,137.06. The Standard & Poor's 500 Index added 2.54 points, or 0.18 percent, to 1,416.48.. The Nasdaq Composite Index dropped 12.45 points, or 0.42 percent, to 2,976.81.

The FTSEurofirst 300 index of top European shares ended up 0.07 percent at 1,132.69. The MSCI world equity index inched up 0.04 percent to 334.15.

The dollar soared to session peaks immediately following the jobs data, but the momentum faded through the day. The dollar index was up 0.2 percent.

The euro fell to a session low of $1.2878 on Reuters data, matching the low set on Nov. 28. It was last down at $1.2927, having trimmed earlier losses, with traders citing a Market News International report that senior European Central Bank Executive Board members opposed a rate cut backed by the majority at the ECB's policy meeting earlier in the week.

But the euro remained under pressure after Germany's central bank cut its growth outlook and pointed to risks of a recession as the three-year-old debt crisis takes its toll on the region's largest economy.

The benchmark 10-year U.S. Treasury note fell 11/32 in price to yield 1.63 percent.

Oil futures prices slipped on Friday as investors worried about Europe's economic problems and the uncertainty over U.S. budget wrangling to avert the fiscal cliff.

Brent crude futures dipped 1 cent to settle at $107.02 a barrel.

U.S. January crude oil futures fell 33 cents to settle at $85.93 a barrel.

But gold prices rose from a one-month low on Friday after the healthy U.S. jobs data supported the view that the Federal Reserve will keep using economic stimulus to bolster growth.

Spot gold inched up 0.2 percent to $1,702 an ounce, bouncing back from a one-month low of $1,683.79.