Mexico stocks, peso gain on U.S. data

(Recasts, adds analyst comment, debt movement and background)

MEXICO CITY, June 18 (Reuters) - Mexican stocks rose on Thursday and the peso firmed as signs of stabilization in the job market and improving regional business conditions in the United States eased worries about the recession.

The IPC stock index .MXX gained 1.21 percent to 24,443, breaking a three-session losing streak that knocked more than 5 percent off the index.

The peso MXN=MEX01 firmed from an early intraday low of 13.4750 to 13.345 per U.S. dollar after the data, 0.13 percent stronger then the central bank's reference level for Wednesday.

Continued claims for U.S. jobless benefits fell last week for the first time since January, dropping by 148,000, the biggest one-week drop in that series since November 2001.

The Philadelphia Federal Reserve's business activity index for the U.S. Mid-Atlantic region in June was still negative but was much better than economists' expectations and the survey's May reading.

The U.S. downturn has driven Mexico into a deep recession and recovery will depend on a rebound of the economy in the United States, Mexico's top trading partner.

Mexican industrial production data for April released on Wednesday showed a 13.2 percent year-on-year slump but seasonally adjusted output edged up 0.95 percent compared to March.

"The seasonally adjusted figure may be a better indicator of the sector's performance ... Industrial activity will continue to post negative annual readings, albeit at a lower pace, in the coming months," HSBC wrote in a report.

In debt trading, the government's benchmark 10-year peso bond MX10YT=RR rose 0.396 of a point in price, pushing its yield down 6 basis points to 8.25 percent.

Mexico's central bank is expected to cut its key lending rate on Friday for the sixth straight month, with 17 out of 23 analysts in a Reuters poll calling for a 50 basis-point cut to 4.75 percent.

In the stock market, shares in cement maker Cemex (CMXCPO.MX) rose for the first time in four sessions, gaining 2.74 percent to 12.76 pesos, rebounding from an 18 percent loss through Wednesday on news Cemex is selling its Australian unit to raise cash for pressing debt payments.

Shares of ICA (ICA.MX), Mexico's top construction company, rose for the second session, adding 3.84 percent to 23.25 after being hit this week by news it plans to dilute its capital by about 30 percent by selling shares to finance infrastructure projects. (Reporting by Michael O'Boyle; Editing by James Dalgleish)