Stocks reach for records as U.S. jobless claims dive

By Elizabeth Dilts Marshall and Marc Jones

NEW YORK (Reuters) - Global stock markets rose on strong European and U.S. shares on Thursday, with stocks brushing off a rapid re-acceleration in coronavirus cases and oil and the dollar extending their first-half rallies.

On Wall Street, the S&P 500 reached its sixth consecutive all-time closing high on upbeat economic data, and European shares ended higher on a rally in crude prices.

Investors now eye Friday's much-anticipated employment report.

"Markets are digesting improved economic data and rising inflation, closely scrutinizing central bank communication for clues regarding the timing, process and magnitude of policy normalization," said Ben Randl, a senior analyst at Bank of America Merrill Lynch.

In an Asia session thinned by a holiday in Hong Kong, Japan's Nikkei fell 0.3% and the yen hit a 15-month low as sources in Tokyo said COVID-19 restrictions were likely to be extended. [.T] [FRX/]

Oil prices rose about 2% on indications that OPEC+ producers could increase output more slowly than expected in coming months, while rising global fuel demand would continue to tighten supply.

The dollar index hit three-month highs and U.S. Treasury yields crept a little higher ahead of Friday's U.S. jobs report, which could offer clues on when the Federal Reserve will start to pare back stimulus.

The benchmark 10-year yield was last up 3.1 basis points at 1.4747%. On Wednesday, it tumbled to its lowest level since June 21 at 1.438%, due mostly to quarter- and month-end demand.

Gold edged up on Thursday as a more than 7% slide in June prompted some traders to buy the metal amid concerns over the Delta variant of the coronavirus.

The MSCI world equity index, which tracks shares in 50 countries, rose 0.26%. The pan-European STOXX 600 index rose 0.62%.

MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.56% lower, while Japan's Nikkei lost 0.29%.

(Graphics: Global markets in 2021, https://fingfx.thomsonreuters.com/gfx/mkt/dgkvlrxebvb/Pasted%20image%201624980375516.png)

Traders think U.S. payrolls on Friday could jolt markets from a slumber that has locked currencies in some of their tightest trading ranges for decades. Initial claims for state unemployment benefits dropped 51,000 to a seasonally adjusted 364,000 for the week ended June 26, the Labor Department said on Thursday, although they are an unreliable guide to Friday's broader indicators.

June had been the best month for the dollar since Donald Trump was elected U.S. president in November 2016, MUFG's currency analyst Lee Hardman said.

"The key trigger," he said "has been the hawkish shift in the Fed’s policy stance. The more hawkish guidance has left market participants less confident that the Fed will maintain loose policy in the coming years."

The U.S. dollar index, which measures the greenback against six major counterparts, rose to 92.602, the highest since early April. It last traded up 0.2% at 92.572.

The Dow Jones Industrial Average rose 131.02 points, or 0.38%, to 34,633.53, the S&P 500 gained 22.44 points, or 0.52%, to 4,319.94 and the Nasdaq Composite added 18.42 points, or 0.13%, to 14,522.38.

Brent crude settled up $1.22, or 1.63%, at $75.84 a barrel. U.S. crude settled up $1.76, or 2.4%, at $75.18 per barrel.[O/R]

Spot gold prices rose $3.3126, or 0.19 percent, to $1,773.12 an ounce.[GOL/]

(Graphic: Currency moves in H1, https://fingfx.thomsonreuters.com/gfx/mkt/jznpnyzyjvl/Pasted%20image%201625007927610.png)

(Reporting by Elizabeth Dilts Marshall in New York and Marc Jones in London; editing by Jonathan Oatis and Dan Grebler)

FILE PHOTO: People are seen on Wall St. outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 30, 2021. REUTERS/Staff/Files

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