By Dion Rabouin
NEW YORK (Reuters) - Equities markets rose worldwide on a bump from positive U.S. data, though U.S. stocks and long-dated Treasury yields fell along with oil prices amid investor caution ahead of Friday's U.S. nonfarm payrolls report for June.
Oil prices slumped more than 4 percent, wiping out Wall Street's early gains, after the U.S. government reported that a drop in weekly crude stockpiles was close to analysts' forecasts but far less than the decline expected by market optimists.[O/R]
Brent crude <LCOc1> fell $2.31 to $46.49 a barrel and U.S. crude <CLc1> dropped $2.22 to $45.22 a barrel.[O/R]
"It seems like it’s just an oil story today," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "And obviously we’re setting up for the jobs report tomorrow; perhaps there’s some positioning going on there."
U.S. equities opened higher as strong private-sector employment data and a drop in jobless claims pointed to a steadying labor market ahead of the key monthly payrolls report, but reversed course to follow oil prices lower.
The Dow Jones industrial average <.DJI> fell 22.74 points, or 0.13 percent, to 17,895.88, the S&P 500 <.SPX> lost 1.83 points, or 0.09 percent, to 2,097.9 and the Nasdaq Composite <.IXIC> added 17.65 points, or 0.36 percent, to 4,876.81.
The U.S. Labor Department will release its monthly report Friday and investors are anxiously anticipating the data after May's disappointing number called into question the strength of the American job market.
Thursday's ADP national employment report showed that 172,000 jobs were added in the private sector in June, surpassing economists' expectation of 159,000.
ADP data showed private payrolls rose 168,000 in May, but the government's nonfarm payrolls data that month reported a gain of only 38,000 jobs, the smallest since September 2010.
Emerging market stocks <.MSCIEF> were buoyed by the robust U.S. data as well as signals that even with strong job growth, there was little chance the Federal Reserve would raise U.S. overnight interest rates because of global growth concerns.
European markets finished higher, reversing a three-day slide with London's FTSE <.FTSE> up 1.09 percent. The CAC in Paris <.FCHI> rose 0.8 percent and Germany's DAX <.GDAXI> was 0.49 percent higher. The pan-European FTSE 300 <.FTEU3> gained 0.96 percent.
MSCI's global gauge of stocks <.MIWD00000PUS> rose 0.3 percent.
The British pound <GBP=>, which fell below $1.30 against the U.S. dollar for the first time since 1985 on Wednesday, again turned lower. It was last down 0.15 percent to $1.2910.
Sterling is down more than 13 percent since Britain voted on June 23 to exit the European Union, with some analysts expecting it to drop to $1.20 in coming months as the Bank of England prepares to ease monetary policy.
The dollar was 0.55 percent lower <JPY=> at 100.76 yen, holding above its trough of 99 hit the day after the British vote.
The strong yen has battered Japanese equities, with Japan's Nikkei <.N225> stock index falling for a third straight session.
U.S. 30-year Treasuries <US30YT=RR> rose 8/32 in price to yield 2.14 percent. The 30-year note hit a record low of 2.098 percent on Wednesday. Benchmark 10-year Treasuries <US10YT=RR> were little changed in price to yield 1.39 percent after touching a record low of 1.321 percent Wednesday.
(Reporting by Dion Rabouin; Editing by James Dalgleish)