*Weaker-than-expected US jobs report slows equities' rally
*MSCI world stock index at highest since Nov. 12
*Consumer spending seen buoying economy
(Updates with U.S. markets' close)
By Al Yoon
NEW YORK, Dec 3 (Reuters) - U.S. stocks rose for a third
day on Friday as investors looked past a disappointing jobs
report and focused on growth elsewhere in the economy.
Gold <XAU=> jumped above $1,410 an ounce, however, forging
its biggest weekly gain since April on lingering fears of a
sprawling European debt crisis and after the U.S. jobs data
sent the dollar tumbling 1 percent.
Stocks in Europe ended slightly lower, but analysts
predicted the overall trend is for equity markets to push
higher. The late-day U.S. stock gains in the face of a slack
labor market suggested investors believed there could be gains
into year-end, analysts said.
"Every other economic data point has been constructive,"
said Phil Orlando, chief equity market strategist, at Federated
Investors, in New York.
Wall Street's recent rally only slowed after the Labor
Department said U.S. businesses added 39,000 nonfarm payrolls
in November, falling short of the 140,000 expected by
economists. The unemployment rate rose to a seven-month high of
9.8 percent. For details see, []
Overall employment for September and October was revised
upward to show 38,000 more jobs created than first estimated.
Investors also expect the weak employment report will keep
government support for financial markets in play.
"The Fed is not going to be able to abandon quantitative
easing in the face of this weak jobs number," said Orlando,
referring to the central bank's efforts to lower interest rates
with the purchases of U.S. debt. "And if Congress thought they
could begin to raise taxes at this point in the fragility of
the economic cycle they are sadly mistaken," he added.
The Dow Jones industrial average <> climbed 19.68
points, or 0.17 percent, to 11,382.09, near a four-week high.
The Standard & Poor's 500 Index <.SPX> rose 3.18 points, or
0.26 percent, to 1,224.71 and the Nasdaq Composite Index
<> increased 12.11 points, or 0.47 percent, to 2,591.46.
The European benchmark FTSEurofirst 300 <> share
index declined 0.2 percent to 1,103.97, following the earlier
decline in U.S. shares. In Asia trading, the Nikkei <>
closed 0.1 percent higher.
The MSCI world equity index <.MIWD00000PUS> knocked out a
0.82 percent gain to reach its highest since Nov. 12.
Many analysts viewed the disappointing employment report as
an outlier amid a slew of generally positive U.S. data released
over the last few weeks that suggest traction for the economy.
Retailers this week reported much stronger-than-expected
year-over-year sales in November. All-time highs for online
sales on so-called Cyber Monday also illustrated strong holiday
spending, galvanizing investor optimism.
"If people who are employed are spending money, the
unemployment rate is not going to be as important," said
Charles Day, a financial adviser at Morgan Stanley Smith Barney
in Purchase, New York.
"The mind-set people are in right now is to look for good
news, and the good news of what's happened over the last two
days of the economy turning is overshadowing bad news.
Investors are looking for reasons to be in the market."
For the dollar, however, the U.S. jobs report injected
enough caution to create a fresh downdraft on the currency.
The euro-zone debt crisis is expected keep the euro under
pressure for some time. European authorities may have bailed
out Ireland, but investors are speculating euro-zone nations
such as Spain and Portugal will require assistance.
The dollar fell against a basket of major trading-partner
currencies, with the U.S. Dollar Index <.DXY> down 1.4 percent
at 79.179. The euro <EUR=> gained 1.43 percent to $1.3413.
Against the Japanese yen, the dollar <JPY=> slumped 1.49
percent to 82.62 yen.
U.S. Treasury prices were mixed as traders first bought
bonds in reversal of short positions after the jobs data.
Other reports on Friday showed the U.S. services sector
grew for an 11th straight month in November and new factory
orders fell. [] [].
Benchmark 10-year Treasury notes fell slightly, and yields
extended their climb to three days for the highest closing
level since July 27.
European shares and the euro drew support among chatter
that the European Central Bank was in the market for bonds from
euro-zone nations in danger of rising borrowing costs and in
possible need of bailouts.
In commodities, U.S. light sweet crude oil <CLc1> rose
$1.35, or 1.53 percent, to $89.35 per barrel. Gold rose $29.50,
or 2.13 percent, to $1413.70.
(Additional reporting by Rodrigo Campos and Gertrude
Chavez-Dreyfuss in New York, and Simon Jessop in London;
Editing by Kenneth Barry)
