* New U.S. jobless claims near six-year low in latest week
* Dollar gains on U.S. data, weakness in euro
* Impasse in Washington talks hangs over market gains
* Brent oil rises after slump early this month
By Herbert Lash
NEW YORK, Sept 26 The dollar rose and global
stocks edged higher on Thursday, led by Wall Street, after
weekly U.S. jobless claims data suggested an improving labor
market, though investors kept an eye on the ongoing impasse in
budget and debt negotiations in Washington.
The Dow and benchmark S&P 500 index snapped a five-day
losing streak after the Labor Department said the number of
Americans filing new claims for unemployment benefits fell last
week to near a six-year low.
The Nasdaq closed just shy of highs last seen almost 13
years ago, after the tech bubble burst.
The data eased some concerns about the U.S. economy that
were spurred by the Federal Reserve's decision last week to keep
its stimulus program intact, to the surprise of many investors.
The jobs data could support the Fed's plan to begin winding that
"The sky is not falling, things are picking up," said Chris
Rupkey, managing director and chief financial economist at Bank
of Tokyo-Mitsubishi UFJ. "A very good monthly jobs report is out
there somewhere on the horizon. The Fed may have to wind down
and exit these policies quicker than they think."
Also on Thursday, the U.S. government left its estimate for
economic growth in the second quarter unchanged at 2.5 percent,
while contracts to buy previously owned U.S. homes fell for a
third straight month in August, a nagging reminder for some of
the economy's less-than-robust health.
A measure of global equity markets, MSCI's all-country world
index traded near break-even, up 0.15 percent,
while the FTSEurofirst 300 index of leading European
shares closed up 0.05 percent at 1,257.53.
On Wall Street, the Dow Jones industrial average
closed up 55.04 points, or 0.36 percent, at 15,328.30. The
Standard & Poor's 500 Index rose 5.90 points, or 0.35
percent, at 1,698.67. The Nasdaq Composite Index climbed
26.33 points, or 0.70 percent, at 3,787.43.
The dollar advanced as the euro was hurt by political
uncertainty in Italy. Allies of scandal-ridden former Prime
Minster Silvio Berlusconi renewed threats to bring down Italy's
coalition government if Berlusconi is barred from politics as
part of his punishment for tax fraud.
The euro was down 0.33 percent at $1.3481.
Against the yen, the dollar was up 0.49 percent at
But the dollar's gains and the jump in U.S. stocks are
expected to be limited because the impasse in congressional
negotiations over increasing the federal borrowing limit could
lead to a possible U.S. debt default.
Republicans and Democrats also are at odds over passing
other legislation to provide stop-gap funding for federal
agencies that would avert a government shutdown on Oct. 1.
House of Representatives Speaker John Boehner urged his
caucus on Thursday to show flexibility over a measure to keep
the government open, a fellow Republican said.
Lawmakers have given themselves very little time to come up
with an agreement, said Art Hogan, managing director at Lazard
Capital Markets in New York.
"I hope it doesn't take a big (market) slide to get them to
say 'this is what happens when we mess up,'" Hogan said.
U.S. Treasuries prices slipped on the stronger jobless
Benchmark 10-year Treasury notes, down 2/32 in
price before the report was issued, fell 6/32 afterward to yield
Gold edged lower after the dollar firmed. Spot gold,
steady above $1,330 before the jobless report, fell 0.7 percent
to $1,323.91 an ounce.
U.S. Comex gold futures settled down $12.10 an ounce
Oil prices rose despite easing political worries about Iran
and an improving supply picture as traders sought bargains after
sharp losses earlier this month.
Brent oil gained 89 cents to settle at $109.21 a
barrel, while U.S. crude futures settled 37 cents higher
at $103.03 a barrel.
On top of concern about the timing of a change in monetary
policy, dealers focused attention on the budgetary and debt
battles going on in Washington.
Congress is struggling to pass a spending bill to keep the
U.S. government funded beyond Oct. 1, but a fight is expected
over raising the debt limit.
U.S. Treasury Secretary Jack Lew warned that the United
States would exhaust its borrowing capacity no later than Oct.
17, though analysts reckon the federal government could keep
paying its debts at least until the end of the month.
Elsewhere, data from the European Central Bank showed that
lending to companies fell in all of the euro zone's big
countries in August, highlighting the questionable strength of
the currency bloc's economic recovery.