* U.S. stocks slip as investors fret about Chrysler
* Oil falls from session highs after U.S. data
* Dollar gains as investors see signs of U.S. recovery
* Government debt losses widen after Fed's big purchase
(Recasts, updates U.S. markets; changes dateline, previous
LONDON)
By Herbert Lash
NEW YORK, April 30 (Reuters) - Oil fell and U.S. stocks
faltered on Thursday after news of Chrysler's bankruptcy
curbed an early rally in equities driven by U.S. economic data
that suggested a deep downturn could be abating.
The dollar reversed early gains, spurred by month-end flows
in currency markets, to trade lower against many major
currencies ahead of the May Day holiday on Friday through much
of Europe.
U.S. government debt was narrowly mixed as investors sifted
through supply and technical factors and a prediction that the
longest recession in U.S. history may end by late summer.
Investors shrugged off a World Health Organization warning
that a flu pandemic was imminent, and analysts said the health
crisis might pass without any significant economic impact.
But the bankruptcy filing by Chrysler after talks to
restructure its debt with lenders broke down rattled investors,
despite the positive tone to recent economic data.
Equity markets overnight in Asia, and then across Europe
and the Americas, rose. MSCI's all-countries world index
<.MIWD00000PUS> gained about 1.4 percent and was on track to
post it's best monthly gain in more than a decade.
"The market is gradually becoming more confident with the
idea that we are pretty close to the trough," said Andrew Bell,
head of research at Rensburg Sheppards.
The number of U.S. workers filing new claims for
unemployment aid surprisingly fell last week, suggesting the
pace of layoffs was easing, even as benefits rolls swelled to
yet another record high in March, the Labor Department said.
The data backed the perception that the 16-month-old
recession was abating, a view supported by a separate report
showing business activity in the U.S. Midwest contracted at a
less severe rate in April as new orders for merchandise surged.
[]
In addition, the Economic Cycle Research Institute said the
longest U.S. recession since the end of the Depression will
probably end before the summer is out.
"The quarter itself may not have been great, but there was
an improving trend there, suggesting some of those tentative
signs of economic stabilization we've seen in other data may
actually be showing up in corporate results," said Jeff
Kleintop, chief market strategist at LPL Financial in Boston.
After 1 p.m., the Dow Jones industrial average <> was
down 12.91 points, or 0.16 percent, at 8,172.82. The Standard &
Poor's 500 Index <.SPX> was down 0.33 points, or 0.04 percent,
at 873.31. The Nasdaq Composite Index <> was up 12.87
points, or 0.75 percent, at 1,724.81.
European equities ended higher, as a key benchmark posted
its best-ever monthly performance, driven by
stronger-than-expected company earnings and hope that the
market was bottoming out.
The FTSEurofirst 300 <> index of top European shares
closed 1.5 percent higher at 828.62 points after hitting its
highest level since mid-January.
The index gained more than 13 percent in April, its best
ever monthly rise.
U.S. Treasury debt prices were mixed.
The Federal Reserve bought $3.025 billion in government
debt as part of its plan to buy up to $300 billion in
longer-term Treasuries within a six month time-frame. Since
late March, the Fed has bought $76.8 billion in Treasuries.
The benchmark 10-year U.S. Treasury note <US10YT=RR> fell
6/32 in price to yield 3.13 percent. The 2-year U.S. Treasury
note <US2YT=RR> rose 1/32 in price to yield 0.93 percent.
The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 0.15 percent at 84.77. Against
the yen, the dollar <JPY=> rose 1.11 percent at 98.58.
The euro <EUR=> was down 0.24 percent at $1.3231 from a
previous session close of $1.3263.
U.S. light sweet crude oil <CLc1> fell 33 cents to $50.64
per barrel.
Spot gold prices <XAU=> fell $8.55 to $889.05 an ounce.
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> soared more than 4 percent to a six-month high,
while Japan's Nikkei <> rose 3.9 percent.
(Reporting by Leah Schnurr, Nick Olivari and Ellen Freilich in
New York and David Sheppard and Atul Prakash in London; writing
by Herbert Lash; Editing by Padraic Cassidy)
