GLOBAL MARKETS-Stocks surge, dollar gains on Wells Fargo, data

                                
 * Wall Street gains on strong Wells Fargo forecast
                                
 * Dollar rises vs yen, cheered by Wells Fargo outlook
                                
 * Bonds slip on rising stocks, easing in jobless woes
                                
 * Oil rises on hope better jobless rate to revive economy
 (Recasts with U.S. markets; changes dateline, previous
LONDON)
                                
 By Herbert Lash
                                
 NEW YORK, April 9 (Reuters) - An upbeat earnings estimate
from No. 4 U.S. bank Wells Fargo sparked a rally in global
equities on Thursday and lifted the dollar as the preliminary
results provided a clear sign a sector that has been at the
heart of the recession is on the mend.
                                
 Reports on U.S. trade and jobless claims added to investor
confidence spurred earlier in the day after Japan's ruling
party said it would increase long-term lending to companies by
a government-affiliated bank by 8 trillion yen ($80 billion).
For more see [ID:nT325185].
                                
 Oil climbed almost 4 percent to above $51 a barrel, fueled
by the stock rally and a slight drop in U.S. jobless claims,
even though the data was still at levels indicating the labor
market's contraction has yet to hit bottom. [ID:nN09264963]
                                
 U.S. Treasuries prices fell because of the positive signs
the jobless claims and U.S. trade data showed for a still
deteriorating economy.
                                
 But it was Well Fargo that gave optimists a reason to cheer
after the San Francisco-based said it expects to report net
income of about $3 billion for the first quarter.
                                
 The bank's estimate was more than twice what analysts on
average expected and suggested that banks with traditional
lending might ride out the recession better than expected.
                                
 Wells Fargo shares jumped 21 percent and lifted the
battered banking sector, with the KBW Banks index <.BKX>
climbing more than 13 percent, putting the index on track for
its longest weekly winning streak since Fall, 2006.
                                
 JPMorgan Chase <JPM.N> gained 11.7 percent, making it the
biggest contributor to the Dow.
                                
 "Wells Fargo as a bank has got two strikes against them:
the fact they're such a large player in the home lending arena
and they're based out of California with substantial exposure"
to mortgages, said Keith Wirtz, chief investment officer at
Fifth Third Asset Management in Cincinnati.
                                
 "This news is good news," he said.
                                
 Before 1 p.m., the Dow Jones industrial average <.DJI> was
up 180.56 points, or 2.30 percent, at 8,017.67. The Standard &
Poor's 500 Index <.SPX> was up 22.20 points, or 2.69 percent,
at 847.36. The Nasdaq Composite Index <.IXIC> was up 48.29
points, or 3.04 percent, at 1,638.95.
                                
 European shares closed higher, buoyed by the positive news
from Wells Fargo and economic data, which boosted banks.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
rose 2.1 percent to close at 778.39 points, its fifth straight
weekly gain.
                                
 Barclays <BARC.L> rose 12.5 percent after it said it was
selling its iShares asset management business to private equity
firm CVC Capital Partners [CVC.UL] for 3 billion pounds ($4.4
billion) in a deal that will be 70 percent funded by the
British bank. [ID:nL9253562]
                                
 The dollar rose against the yen after positive U.S.
earnings news rekindled the appetite for so-called riskier
assets such as stocks ahead of the Easter weekend.
                                
 "Some of the U.S. companies that reported did a little
better than expectations" and that has caused a rise in the
dollar versus the yen," said Brian Kim, currency strategist, at
UBS in Stamford, Connecticut.
                                
 The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 0.58 percent at 85.725. Against
the yen, the dollar <JPY=> was up 0.62 percent at 100.33.
                                
 The euro <EUR=> fell 0.78 percent at $1.3154.
                                
 Debt prices fell. The benchmark 10-year U.S. Treasury note
<US10YT=RR> fell 15/32 in price to yield 2.92 percent. The
2-year U.S. Treasury note <US2YT=RR> fell 1/32 to yield 0.95
percent.
                                
 U.S. light sweet crude oil <CLc1> rose $1.40 to $50.78 a
barrel.
                                
 Spot gold prices <XAU=> rose 35 cents to $879.90 an ounce.
                                
 Overnight in Asia stocks pushed back toward a six-month
high. Japan's Nikkei share average <.N225> jumped 3.7 percent
after the government announced a bigger-than-expected
stimulus.
                                
 The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 3.2 percent.
 (To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge
Fund Blog click on http://blogs.reuters.com/hedgehub)
 (Reporting by Gertrude Chavez-Dreyfuss, Burton Frierson in New
York and Joe Brock and Jan Harvey in London; writing by Herbert
Lash ; Editing by Theodore d'Afflisio)