GLOBAL MARKETS-U.S. jobs data pushes equities, dollar higher

Fri Dec 7, 2012 10:38am EST

* Wall St opens higher as jobs data lifts

* Euro falls 0.4 pct as rate cut talk grows

* Bundesbank cuts growth outlook, hints at recession

By Leah Schnurr

NEW YORK, Dec 7 (Reuters) - Global shares and the U.S. dollar pushed higher on Friday after a surprisingly strong American jobs report for November, though a drop in consumer sentiment kept a cap on gains in equities.

U.S. non-farm employment increased by 146,000 jobs last month, data showed, defying expectations of a sharp pull-back related to superstorm Sandy that hit the U.S. Northeast.

Wall Street opened modestly higher but pared gains after data showed consumers' attitudes soured in early December because of concerns about spending cuts and tax increases that will be triggered in 2013 unless U.S. lawmakers can agree to a deal.

"While it is just one measure of consumer sentiment, maybe the constant barrage of back and forth in DC with no resolution yet is having an impact," said Peter Boockvar, managing director at Miller Tabak & Co in New York.

The Dow Jones industrial average gained 55.56 points, or 0.42 percent, to 13,129.60. The Standard & Poor's 500 Index added 3.55 points, or 0.25 percent, to 1,417.49. The Nasdaq Composite Index edged up 1.06 points, or 0.04 percent, at 2,990.32.

The FTSEurofirst 300 index of top European shares was up 0.2 percent, while the MSCI world equity index was nearly flat.

The dollar soared to session peaks immediately following the jobs data, but the momentum faded as traders parsed the details.

"The big takeaway is that Sandy did not have the impact, the negative effect that people thought it would have," said Jacob Oubina, senior U.S. economist at RBC Capital Markets in New York.

"While this was dramatically better than feared, it also was not a breakout of the trend," he said.

Pressure was added to the euro 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 euro fell to a session low of $1.2878 on Reuters data, matching the low set on Nov. 28. It was last down at $1.29. The dollar index was up 0.3 percent.

The bleak warning came just a day after the ECB slashed its own economic forecasts for the entire 17-nation euro area next year, while leaving its main interest rate at a record low 0.75 percent for the fifth month running.

"The discussion on interest rates is what started the slide in the euro in the last 24 hours, and the Bundesbank report has just compounded that," said Neil Mellor, currency strategist at Bank of New York Mellon.

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 fluctuations in the markets.

Talks have come down being between Republican House Speaker John A. Boehner and President Barack Obama, according to Capitol Hill aides.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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