GLOBAL MARKETS-Dollar gains, stocks set fresh highs on U.S. labor report

(Adds U.S. market open, byline, changes dateline; previous
LONDON)
* U.S payrolls weaker than expected in December
* MSCI all-world, U.S. stock indexes at fresh record highs
* Dollar rises to two-week high
* Oil slips on unexpected rise in U.S. crude inventories
* Dow industrials surpass 29,000 mark

By Herbert Lash
NEW YORK, Jan 10 (Reuters) - The dollar edged higher and
global equity markets rallied to fresh highs on Friday after a
U.S. labor report showed job growth slowed in December while
still underpinning a strong economy that will allow the Federal
Reserve to stand pat on interest rate policy.
The U.S. jobless rate held steady at near a 50-year low of
3.5% and nonfarm payrolls increased by 145,000 jobs, above the
100,000 mark needed to keep up with population growth, the
monthly Labor Department employment report said. The yield on U.S. government debt fell, pushing prices up,
as the pace of hiring remained strong enough and the
unemployment rate low enough to keep on track the longest U.S.
economic expansion in history.
The soft U.S. payrolls number, following a batch of strong
economic figures, was unlikely to sway the Fed from its current
neutral stance on rates, analysts said.
"The economy continues to grow and there's an absence of
inflation pressure, and that's positive for stocks and bonds,"
said Joseph LaVorgna, chief economist for the Americas at French
bank Natixis in New York.
"There was no way this type of report was going to get the
market nervous about recession risks or inflation. It's a win
for both the stock and bond market."
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.28% to a record, while the three main indexes on Wall
Street also set fresh highs for the second day in a row.
On Wall Street, the Dow Jones Industrial Average crossed the
29,000 mark for the first time, helped by gains in technology
and healthcare stocks.
Technology shares .SPLRCT , the market leader of the past
decade, were poised for the sharpest gains this week among the
11 main S&P sectors. Investors welcomed news that sales of
Apple's iPhones in China in December jumped more than 18% on the
year.
The Dow .DJI rose 13.19 points, or 0.05%, to 28,970.09.
The S&P 500 .SPX gained 6.55 points, or 0.20%, to 3,281.25 and
the Nasdaq Composite .IXIC added 29.88 points, or 0.32%, to
9,233.31.
European shares also rose, without hitting new records. The
pan-European STOXX 600 index .STOXX rose 0.04% and Germany's
DAX .GDAXI rose 0.15%, while Britain's FTSE 100 .FTSE
advanced 0.13%.
Emerging market stocks rose 0.52%.
The U.S. dollar rose to two-week highs on Friday, on track
for its biggest weekly gain in two months, as easing tensions
between the United States and Iran helped boost risk appetite.
The dollar index .DXY fell 0.04%, with the euro EUR= up
0.05% to $1.111. The Japanese yen JPM= weakened 0.01% versus
the greenback at 109.54 per dollar.
MSCI's emerging market currency index .MIEM00000CUS ,
although little changed on Friday, hit 1-1/2-year highs on
Thursday in what is likely to be its sixth straight week of
gains. It has also benefited from three U.S. rate cuts last
year.
Brent oil futures fell below $65 a barrel as Middle East
tensions eased and investors focused on rising U.S. crude
inventories and other signs of ample supply.
Brent crude LCOc1 , the global benchmark, slid 42 cents to
$64.95 a barrel, and was heading for its first weekly decline in
six weeks. West Texas Intermediate crude CLc1 slipped 44 cents
to $59.12.
Spot gold XAU= added 0.4% to $1,558.98 an ounce.

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