* Global stocks fall on rising oil, economic data
* Iran nuclear plans, Nigeria attacks weigh on oil market
* Bonds erase losses as U.S. job losses less than expected
* Dollar rises as economic outlook weighs on euro
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, Aug 1 (Reuters) - Global equities fell amid signs
of a spreading impact from rising oil prices and the credit
crunch on Friday, although the dollar gained on signs the U.S.
economy may be recovering faster than others.
Crude rose after Israel warned that Iran was on the verge
of a breakthrough in its nuclear program, prompting concerns of
a supply disruption from the OPEC nation if a confrontation
were to break out.
Investors sifted through a raft of economic data from the
United States and around the world, and what it meant for the
currency, debt and equity markets.
A government report showing U.S. employers cut jobs for the
seventh straight month in July weighed on stocks. The report
also showed the jobless rate jumped to a four-year high.
While the loss of 51,000 jobs in July was not as woeful as
many on Wall Street had feared, the underlying data showed
patterns consistent with previous recessions.
Oil companies, utilities and computer hardware companies
like Exxon Mobil, AT&T and Microsoft led the broad market
lower, but the beaten-down U.S. financial sector rallied, led
by a 10 percent gain in Wachovia Corp <WB.N>.
The Dow Jones industrial average <> fell 51.70 points,
or 0.45 percent, at 11,326.32. The Standard & Poor's 500
Index<.SPX> fell 7.07 points, or 0.56 percent, at 1,260.31. The
Nasdaq Composite Index <> shed 14.59 points, or 0.63
percent, at 2,310.96.
The dollar rose against the euro on the view Europe's
economies may face greater headwinds in the near future than
the already slumping U.S. economy.
In Europe, countries like Italy and Spain are flirting with
recession, and surveys of European manufacturing companies
published on Friday suggest tougher times lay ahead.
Also, the U.S. data followed reports from China, the euro
zone, Germany, Britain and Sweden on Friday that pointed to a
widening slowdown that is leaving few economies around the
world unscathed a year after the start of a credit crunch.
Signs of that crunch could be seen in U.S. auto sales,
which tumbled in July. Tight credit and weak consumer
confidence drove double-digit declines at General Motors Corp
<GM.N>, Ford Motor Co <F.N> and Toyota Motor Corp <7203.T>.
Jean-Marc Lucas, an economist at BNP Paribas in Paris, said
the U.S. labor data was mostly in line with recent months.
"The job losses are slightly lower than what we saw earlier
this year, but the unemployment rate is getting worse," Lucas
said.
While U.S. data has been ambiguous, data from Europe and
Australia has generally pointed to more clearly deteriorating
economic fundamentals.
"The contrast between Europe and the U.S. is becoming
starker and is more dollar favorable," said Marc Chandler, head
of global FX strategy at Brown Brothers Harriman in New York.
"We are not out of the woods by any means, but the price
action seems to indicate that many people are more inclined now
to sell euro rallies than to buy dips."
The dollar climbed to one-month peaks against the euro.
It rose against major most currencies, with the U.S. Dollar
Index <.DXY> up 0.31 percent at 73.42. Against the yen, the
dollar <JPY=> was down 0.10 percent at 107.71.
The euro <EUR=> fell 0.33 percent at $1.5548.
Platinum slid nearly 7 percent and palladium by more
than 6 percent on the spate of poor results in the automotive
sector and firmer oil prices.
GM shares initially fell as much as 10.6 percent in
reaction to the automaker's much bigger-than-expected quarterly
loss, the third-largest in its history.
But analysts credited GM with moving to cut costs and shore
up its cash position, helping shares to trim losses. They said
GM faces continued risks from a weak U.S. auto market now seen
slumping into 2010. The stock cut its final loss to 7.6
percent.
Shares of Biogen Idec <BIIB.O> fell more than 28 percent in
reaction to reports of problems with its multiple sclerosis
drug, while Sun Microsystems <JAVA.O> lost nearly 14 percent
after a profit warning. Sun also reported poor business
computer sales.
Biogen was the biggest drag on the S&P 500. Two new brain
disease cases were detected in patients taking Tysabri, a
multiple sclerosis drug jointly manufactured with its Irish
partner Elan, whose shares plunged 46 percent.
BMW sank 5.3 percent after warning it would miss its 2008
targets and it posted a 44 percent drop in quarterly pretax
earnings.
Renault, which has a significant stake in Nissan, fell 3.4
percent, Daimler lost 2.1 percent and Volkswagen fell 4.1
percent.
But the heaviest negative weights on the FTSEurofirst 300
index were in the mining sector, with Rio Tinto losing 5.7
percent, Anglo American falling 5.3 percent and Xstrata
dropping 6 percent.
The FTSEurofirst 300 index of top European shares closed
down 1.38 percent at 1,163.73 points.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
3/32 to yield 3.94 percent. The 30-year U.S. Treasury bond
<US30YT=RR> added 2/32 to yield 4.57 percent.
Further support for oil came from supply outages in
Nigeria, where rebel attacks on pipelines this week cut output
by 150,000 barrels per day.
U.S. crude <CLc1> rose $1.02 to settle at $125.10 a barrel,
off an earlier high of $128.60. London Brent crude <LCOc1>
settled up 20 cents at $124.18 a barrel.
Gold ended down. The December contract for gold <GCZ8>
settled down $5.20 at $917.50 an ounce in New York.
Weak U.S. economic data and a grim outlook for Japanese
banks caused Asian stocks to sag overnight.
MSCI's index of Asia stocks outside Japan <.MIAPJ0000PUS>
fell 1.4 percent, and the Nikkei average <> fell 2.1
percent.
(Reporting by Walter Brandimarte, Richard Leong, Lucia
Mutikani and Gertrude Chavez-Dreyfuss in New York; Santosh
Menon, Jan Harvey, Kirsten Donovan in London and Blaise
Robinson in Paris)
(Writing by Herbert Lash. Editing by Richard Satran)
