GLOBAL MARKETS-Stocks, euro jump on US jobs, Europe hopes

Forex News

* Higher-than-expected US data rekindles appetite for risk

* Euro rallies for 4th day, also supported by ECB measures

* Thirty-year Treasuries fall more than 1 point in price

By Walter Brandimarte

NEW YORK, Oct 7 (Reuters) - World stocks and the euro rallied on Friday after stronger-than-expected U.S. employment data eased fears of another global recession.

Hopes for a stronger policy response to the euro zone debt crisis also supported the European single currency, which rose against the dollar for the fourth consecutive session.

Prices of U.S. government bonds slid after the U.S. Labor Department said nonfarm payrolls rose by 103,000, above expectations for a 60,000 rise. Jobs gains for prior months were also revised higher. For details, see [ID:nOAT004877].

"It's a breath of fresh air and should allow the risk recovery we've had this week to continue," said Brian Dolan, chief strategist at Forex.com in New Jersey.

"All in all, it suggests a continuation of the risk recovery and that the U.S. will outperform other developed economies," he added.

Key Wall Street indexes opened higher, although the Nasdaq slipped into the red.

The Dow Jones industrial average <.DJI> rose 49.42 points, or 0.44 percent, to 11,172.75, while the Standard & Poor's 500 Index <.SPX> gained 0.46 points, or 0.04 percent, to 1,165.43. The Nasdaq Composite Index <.IXIC> was down 7.20 points, or 0.29 percent, at 2,499.62.

World stocks measured by the MSCI All-Country World index <.MIWD00000PUS> gained 1 percent.

Earlier, German data showed industry output in the European giant dropping 1 percent in August, a smaller-than-expected decline. [ID:nL5E7L711S]

The euro , which has fallen back from a 2011 peak near $1.50 in May, rose 0.26 percent to $1.3466.

Hopes of a more robust policy response to the two-year-old euro zone sovereign debt crisis rose this week after euro zone policy makers pledged to present a plan for a coordinated recapitalization of the region's banks.

Aggressive liquidity measures that the European Central Bank (ECB) unveiled on Thursday to help lenders facing straitened wholesale funding conditions further emboldened risk appetite.

Safe-haven investments such as U.S. Treasury bonds sold off as a result. Thirty-year Treasuriesled losses, falling more than one point in price to yield 3.018 percent.