* U.S. stocks gain on late-day rally in tech shares
* European stocks hit 2-week closing high
* Treasuries fall in renewed appetite for risk-taking
(Recasts, updates with U.S. market close)
By Jennifer Ablan
NEW YORK, June 3 (Reuters) - The dollar rose broadly and
U.S. stocks staged a late-day rally to end higher as optimism
ahead of Friday's key monthly jobs report overshadowed concern
that Europe's debt crisis is worsening.
U.S. Treasuries debt prices fell in choppy trade as
investors trimmed their safe-haven holdings of government bonds
in anticipation of a robust May payrolls report.
Crude oil prices rose more than 2 percent as a government
report showed that inventories of crude oil and gasoline fell
more than expected last week.
Skittish investors kept markets volatile through most of
the day. U.S. stocks fell in response to weakness in the euro,
but were supported by data on private sector employment and
jobless claims, before finally ending higher. A rally in
technology shares led Wall Street gains.
And although the dollar maintained strength throughout the
day, its rise was driven by contradictory sentiment: supported
early on bullish bets for Friday's non-farm payrolls data and
bought later by bearish investors in a risk-aversion move in
case expectations for jobs growth are too high.
Economists are looking for 513,000 non-farm jobs being
added to the economy. For more details, click on
[].
The Dow Jones industrial average rose 5.74 points, or 0.06
percent, to 10,255.28. The Standard & Poor's 500 Index <.SPX>
gained 4.44 points, or 0.40 percent, to 1,102.82. The Nasdaq
Composite Index <> closed up 21.96 points, or 0.96
percent, to 2,303.03.
"It's more like apathy than it is any kind of dynamic
momentum," said Nick Kalivas, vice president of financial
research & senior equity index analyst at MF Global in Chicago.
"There is a limited willingness to take the market higher in
front of the jobs report."
The Philadelphia semiconductor index <.SOXX> rose 1.2
percent. Microsoft Corp <MSFT.O> rose 1.5 percent to $26.86
after Chief Executive Steve Ballmer said the company will
continue to prosper even as the transition from PCs to other
devices poses a "potential tumult." For details, see
[].
Weakness in the euro kept a lid on stocks, while the S&P
encountered resistance around its 200-day moving average.
Data on Thursday showed private employers added jobs in May
and initial jobless claims fell last week.
HUNGARY: SHADE OF GREECE?
The euro came under pressure after a Hungarian official
representing the new government forecast a budget deficit that
greatly exceeded the current deficit target.
In late afternoon trading in New York, the euro was last
down 0.7 percent at $1.2160, near the session low of $1.2153
<EUR=>, according to Reuters data. The euro touched a more than
four-year low against the dollar on Tuesday at $1.2110 on
electronic trading platform EBS.
A top Hungarian government official said the deficit could
come in at over 7 percent of gross domestic product this year,
far above the 3.8 percent target agreed with the International
Monetary Fund and European Union.
The vice chairman of the ruling Fidesz party, Lajos Kosa,
said there was only a slim chance of avoiding a Greek-style
scenario, according to business news website napi.hu.
Five-year credit default swaps on Hungary rose by 58 basis
points to 320 basis points, meaning it costs $320,000 a year to
insure $10 million of debt for five years.
European markets, which closed ahead of the sell-off in the
euro, rose to a two-week closing high. Oil companies bounced,
helped by a surge in the price of crude and as growth in the
euro zone services sector boosted sentiment.
"It's a relief rally, a snapback, after these horrifying
days and weeks, with the Greek and European tragedy," said
Franz Wenzel, strategist at AXA Investment Managers in Paris.
The pan-European FTSEurofirst 300 <> index of top
shares rose 1.39 percent to end the day provisionally at
1,017.50 points, the highest close since May 18. The index is
still down more than 8 percent from a mid-April peak, on
worries a debt crisis in the eurozone could derail economic
recovery.
Global stocks as measured by MSCI <.MIWD00000PUS> climbed
1.08 percent, after earlier reaching highs last seen on May 19.
Earlier, Tokyo's Nikkei share average <> rose over 3.0
percent, posting its biggest one-day rise in six months.
Emerging markets stocks <.MSCIEF> rallied 1.7 percent,
according to an MSCI index.
U.S. Treasuries fell modeslty, with the sell-off slowed as
the market found technical support.
Benchmark 10-year Treasury notes <US10YT=RR> fell 3/32 in
price to 101-6/32. Their yield, which moves inversely to price,
last traded at 3.36 percent, up from 3.25 percent on Wednesday.
The 10-year yield touched 3.427 percent earlier, crossing a key
retracement level from the year-high of 4.00 percent to a
13-month low of 3.06 percent.
U.S. crude oil futures <CLc1> rose $1.75, or 2.4 percent,
to settle at $74.62 a barrel.
Gold closed down on the day. Spot gold <XAU=> dropped to
$1,207.25 an ounce, well off $1,224.30 in late Wednesday
business in New York.
(Additional reporting by Richard Leong and Leah Schnurr;
Editing by Leslie Adler)
