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TOPWRAP 8-Investors cheer data, US to push reforms this year

* Obama to seek financial reforms this year - sources

* Global stocks, oil get boost from U.S. jobs data

* U.S. banks rush to sell stock after “stress tests”

* German exports rise, industrial output stabilizes

* Canada posts surprise jobs jump (For full crisis coverage, double click on [nCRISIS])

By John O’Callaghan

WASHINGTON, May 8 (Reuters) - Signs the global downturn may be easing grew on Friday with U.S. jobs and German exports data, as Washington looked set to push tighter financial rules this year now that “stress tests” on U.S. banks are done.

Investors around the world took heart after U.S. regulators ordered 10 of the country’s 19 biggest banks on Thursday to raise nearly $75 billion of capital -- less than some analysts had estimated -- to bolster themselves against further shocks.

In the next step, U.S. President Barack Obama’s team plans to propose legislation to Congress by June calling for the Federal Reserve to regulate “systemic risk” in the economy, three trade association sources said. [ID:nN08510006]

Lawrence Summers, a senior adviser to Obama, was expected to lead the regulatory restructuring amid a commitment to enact reforms into law this year, said the sources, based on a briefing by administration officials.

After the results of the stress tests were made public, three U.S. banks sold shares and debt on Friday to shore up their financial foundations. [ID:nL81019092]

“There are a whole lot of hungry banks stepping up to the banquet table. They know if they’re not first in line, there might not be any shrimp left on the table for them,” said Brad Hintz, an analyst at Sanford C. Bernstein.

Hints of improvement in the recession-hit U.S. economy came from data showing employers cut 539,000 jobs in April -- the smallest number since October and fewer than economists had forecast in a Reuters poll. [ID:nN08455623]

But the U.S. Labor Department said the unemployment rate soared to 8.9 percent, the highest since September 1983.

Obama, whose new administration has rolled out a $787 billion package of spending and tax cuts to kick-start the world’s largest economy, said the jobs data was “somewhat encouraging” but “still a sobering toll.”

"Step by step, we're beginning to make progress," he said. (For charts showing Obama's 2010 budget and deficit projects, go to: here)

In Canada, data showed a surprise increase of 35,900 jobs in April but some analysts said the figures were most likely an aberration. [ID:nN08444159]

Optimists welcomed German data for March showing exports rose for the first time in six months and industrial output was unchanged, avoiding a fall for the first time in seven months. [ID:nL8651157] [ID:nL8689234]

“The German patient is on the road to recovery though he’s still sickly,” said UniCredit economist Andreas Rees.

Brazil’s Finance Minister Guido Mantegas said the economy shrank a bit in the first quarter, putting the major emerging market in a technical recession. But he added that “in March we already saw strong signs of a recovery.” [ID:nN08503240]

The Chinese ambassador to the United States, Zhou Wenzhong, said China’s stimulus package -- estimated at $586 billion over two years -- was “already paying off” and will help “promote sustainable economic development.” [ID:nN08499609]

BANKS RAISE CAPITAL

All three major U.S. stock indices closed higher, with financial and energy shares leading the charge, on hopes the worst was over for banks and the economy.

For the week, the Dow index .DJI rose 4.4 percent, the S&P 500 .SPX gained 5.9 percent and the Nasdaq .IXIC added 1.2 percent, its ninth-straight positive week.

European shares .FTEU3 ended up 1.7 percent on Friday and Japan's Nikkei index .N225 hit a six-month closing high.

U.S. crude oil CLc1 was more than 3 percent higher at around $58.73 per barrel.

The dollar fell against the yen JPY= and the euro EUR=, which surged to a six-week high above $1.36, as the jobs data curtailed safe-haven flows into the U.S. currency. [FRX/]

The stress tests showed Bank of America BAC.N had the largest need for capital at $33.9 billion, with Citigroup C.N needing $5.5 billion, Wells Fargo WFC.N $13.7 billion and GMAC GKM.N $11.5 billion.

The U.S. government, which has spent hundreds of billions of dollars bailing out financial institutions, hopes they can fill the holes with private capital, although Federal Reserve Chairman Ben Bernanke said Washington would help if needed.

Morgan Stanley MS.N sold $4 billion of shares on Friday and Wells Fargo sold $7.5 billion -- both more than expected.

Bank of America, which plans to sell shares worth more than $17.5 billion, sold $3 billion of five-year notes on Friday, while Morgan Stanley sold $4 billion of notes.

U.S. Treasury Secretary Timothy Geithner told Reuters Television that fears of a catastrophic financial meltdown were waning but there was still “a long way to go” before credit conditions could be considered normal. [ID:nN08487783]

The chief executive of Goldman Sachs GS.N, which got a clean bill of health in the bank stress tests, said he believed an end to the current crisis was "in sight." [ID:nN08480883]

“My hope is and, if I had to guess, I’d say that business feels like it’s off its lowest ebb,” Lloyd Blankfein told shareholders at Goldman’s annual meeting.

Despite that cautious optimism, many companies are suffering in the interim.

Fannie Mae FNM.N, the largest provider of funding for U.S. home mortgages, said it lost $23.2 billion in the first quarter, sending it to the U.S. Treasury for a second time for capital to keep it afloat. [ID:nN08456534]

Fannie Mae’s results appeared to contradict recent data suggesting the troubled U.S. housing market -- the genesis of the global financial crisis -- is bottoming out.

Royal Bank of Scotland RBS.L and Germany's Commerzbank CBKG.DE posted first-quarter losses and were the latest European banks to say bad debts were rising. [ID:nL81019092]

Toyota Motor Corp 7203.T, the world's largest car maker, posted a $6.9 billion loss for the final quarter and forecast increasing losses this financial year. [ID:nT285085] (Reporting by Reuters correspondents worldwide; Editing by Leslie Gevirtz)

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