Stocks rise, cheered by jobless claims euro up

U.S stocks rose after four days of losses on Thursday, helped by further signs of improvement in the labor market in the world's largest economy, while the euro recovered some ground after the IMF said euro zone economies should have more time to cut budget deficits.

Brent crude oil reached its highest in a month, lifted by escalating tension between Syria and Turkey.

Claims for U.S. jobless benefits fell last week to the lowest level in more than four and a half years, in Labor Department data on Thursday that may provide a boost to President Barack Obama a month before voters go to the polls.

"We're starting to hear noise about companies hiring, and that's what the market is waiting for," said Jordan Waxman, managing director Hightower Advisors in New York.

"Without labor market improvement, we can't get a sustainable rally. The numbers seem to be moving in the right direction."

The Dow Jones industrial average gained 33.02 points, or 0.25 percent, to 13,377.99. The Standard & Poor's 500 Index <.SPX> gained 6.20 points, or 0.43 percent, to 1,438.76. The Nasdaq Composite Index gained 9.54 points, or 0.31 percent, to 3,061.32.

The FTSEurofirst 300 ended up 0.9 percent, while the MSCI global index gained 0.5 percent.

In the currency market, the euro was the primary beneficiary of improved market sentiment, as it recovered from a more than one-week low. It was last at $1.2948, up 0.6 percent, rising for the first time in four days.

Spanish bond yields turned lower by late morning, erasing an earlier spike to near the critical 6.0 percent mark after Standard & Poor's cut the country's credit rating late Wednesday.

S&P cut Spain's rating two notches to BBB-minus, one step from junk status, late on Wednesday, warning that an intensifying recession and poor response from euro zone policymakers to the crisis had left Spain highly vulnerable.

Ten-year Spanish yields were down 4.4 basis points on the day at 5.78 percent, having hit a session high at 5.96 percent earlier.

Markets expect Spain to be the first of the euro zone's "big four" economies to require a rescue package.

"We are working on the assumption that Spain will make a request for aid and so the only uncertainty comes from pinning down exactly when that will occur," said Nick Matthews, Senior European economist at Nomura in London.

There was some hope the S&P downgrade, and calls from the head of the IMF, Christine Lagarde, for urgent action, would shepherd Spain into an aid request and pave the way for the ECB to buy its bonds.

Lagarde said in Tokyo that political wrangling was adding to global economic uncertainty and prodded the world's rich countries to take swifter action as Europe's debt crisis drags on.

Tensions in the Middle East pushed Brent crude above $115 a barrel, while U.S. crude futures rose 90 cents to $92.15 per barrel.

Turkey scrambled fighters and briefly detained a Syrian passenger plane on Wednesday, suspecting it of carrying military equipment from Moscow, while Turkey's military chief warned of a more forceful response if shelling continued to spill over the border.