* Global stocks, Brent buoyed by steps to safeguard banks
* U.S. private sector jobs report also lifts optimism
* Euro falls vs dollar on doubts about Greek progress
* Euro zone private sector activity contracts, a bad sign
(Adds opening of U.S. markets, byline, dateline; previous
By Herbert Lash
NEW YORK, Oct 5 Global stocks and oil prices
rebounded on Wednesday after reassuring U.S. economic data and
hopeful signs authorities are moving forward to contain the
latest outbreak in Europe's debt crisis.
Wall Street traded near break-even after opening lower as a
better-than-expected report on the U.S. services sector helped
offset lingering doubts the debt crisis is over and concerns
that data in Europe suggested the region is sliding into
European stocks gained 2 percent, pushed higher by banking
shares, and Brent crude bounced back above $101 a barrel on
news that European finance ministers are exploring ways to
recapitalize the ailing sector. For details see:
European shares rose after tumbling nearly 5 percent the
past three sessions. The benchmark S&P 500 index in the United
States had fallen 10 percent over the past six sessions.
The FTSEurofirst 300 .FTEU3 index of top European shares
was up 2.4 percent at 909.45 points. MSCI's all-country world
index .MIWD00000PU rose 0.8 percent to 274.24.
Brent crude LCOc1 rose $1.80 to $101.59 a barrel, while
U.S. crude CLc1 was up $2.03 at $77.70 a barrel.
Surveys that showed private sector business activity shrank
in the euro zone for the first time in two years last month as
new orders dried up kept enthusiasm among many investors in
"I'm not sure this is the end of the bear trend, this is a
short term bounce. But until there is actual doing as well as
comments, we won't see a sustainable recovery," said Andy
Sommer, an analyst at EGL in Dietikon, Switzerland.
The Dow Jones industrial average .DJI was up 9.35 points,
or 0.09 percent, at 10,818.06. The Standard & Poor's 500 Index
.SPX was up 2.11 points, or 0.19 percent, at 1,126.06. The
Nasdaq Composite Index .IXIC was up 2.38 points, or 0.10
percent, at 2,407.20.
The Institute for Supply Management said its services index
dipped to 53.0 last month from 53.3 in August but employment in
the vast U.S. services sector fell in September to its lowest
level since April 2010.
"Beneath the surface, it's actually a fairly mixed report,"
said Tom Porcelli, chief economist at RBC Capital Markets in
New York. "New orders index improved -- it's the best we've
seen since the middle of the year -- but the employment index
slipped below breakeven."
The euro fell, weighed by a lack of concrete details to
deal with the region's debt crisis and worries over a Greek
default even after a pledge by policymakers to strengthen
European banks. [ID:nN1E7940BT]
A downgrade of Italian sovereign debt by ratings agency
Moody's highlighted the funding difficulties facing the euro
zone's third biggest economy, while France and Belgium were
forced to help Dexia SA (DEXI.BR) in the first state rescue of
a European bank in the crisis. [ID:nL5E7L4447]
The euro rallied to trade little changed against the dollar
after better-than-expected U.S. private-sector jobs data
boosted risk appetite but that advance proved fleeting. For the
ADP report, click [ID:nEAPA50EH0].
"Slightly better employment data would signal risk
preference but a lack of progress in any meaningful way on
resolving Greece and the debt crisis in general is keeping risk
at bay," said John McCarthy, director of foreign exchange at
ING Capital Markets in New York. "A downgrade of Italy has
brought everyone back to reality."
The euro EUR= was down 0.1 percent at $1.3332. The U.S.
dollar index of major trading currencies .DXY fell 0.7
percent to 79.053.
The prices of U.S. Treasury securities fell, with yields
nearing session highs after the report on U.S. private sector
jobs showed more job growth than expected in September.
Benchmark 10-year Treasury notes US10YT=RR were down
20/32 in price to yield 1.88 percent.
(Reporting by Emily Flitter, Ryan Vlastelica, Nick Olivari in
New York; Simon Falush, Jan Harvey in London; Blaise Robinson
in Paris; Writing by Herbert Lash, Editing by Chizu Nomiyama)