US STOCKS-Dow, S&P close at records; payrolls in focus

Reuters - UK Focus

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* ECB cuts rates below zero to spur bank lending

* Preview: U.S. job growth seen slowing, unemployment toedge up

* Indexes up: Dow 0.6 pct, S&P 0.7 pct, Nasdaq 1.1 pct

By Angela Moon

NEW YORK (Frankfurt: HX6.F - news) , June 5 (Reuters) - The Dow and the S&P 500 bothended at new highs on Thursday after the European Central Bankcut rates to record lows and pledged to do more if needed tofight off the risk of deflation.

Investors are now focused on Friday's U.S. payrolls reportfor May. It is expected to show job growth slowed last month andthe unemployment rate ticked up, but not by enough to upset theview that the economy is bouncing back.

The number of Americans filing new claims for unemploymentbenefits rose last week, but the underlying trend continued topoint to a firming labor market.

"The number of data we got this week so far on the labormarket have not provided a clear direction for tomorrow'snumbers," said Randy Frederick, managing director of trading andderivatives with the Schwab Center for Financial Research inAustin.

"So I wouldn't be surprised if the market sold on the(payrolls) news tomorrow, but it's likely to just be a knee-jerkreaction."

The day's gains were broad, with all ten S&P 500 sectorsending higher. Industrials rose 1.1 percent andfinancials 0.9 percent. The day's weakest sector wastelecom, considered a defensive group, which rose lessthan 0.1 percent.

The Dow Jones industrial average rose 98.58 points or0.59 percent, to 16,836.11, the S&P 500 gained 12.58points or 0.65 percent, to 1,940.46 and the Nasdaq Composite added 44.59 points or 1.05 percent, to 4,296.23.

With Thursday's advance, the S&P has risen in nine of thepast 11 sessions, up 3.6 percent over that period, and ended ata record high five times in the past six sessions.

The ECB cut the deposit rate to -0.10 percent and launched aseries of measures to pump money into the sluggish euro zoneeconomy. It stopped short of full-fledged quantitative easing(QE) - printing money to buy assets - but ECB President MarioDraghi said more action would come if necessary.

Also supporting the day's gains, hedge fund manager DavidTepper was reported by CNBC as saying the ECB partly"alleviated" his concerns about the market, after having saidlast month he was worried stock prices were stretched. Inc revived speculation about its nextmajor product on Wednesday, using a mysterious YouTube video andwebsite post to tease a June 18 "launch event" in Seattle to behosted by CEO Jeff Bezos. The stock jumped 5.5 percent to$323.57.

Sprint (Frankfurt: 2S7.F - news) has agreed to pay about $40 per share to buyT-Mobile US, marking further progress in the attempt tomerge the third and fourth-biggest U.S. mobile networkoperators, a person familiar with the matter told Reuters onWednesday. Sprint shares fell 4 percent to $9.02 while T-MobileUS dropped 2.3 percent to $33.49.

Rite Aid (Berlin: RTA.BE - news) shares slid 7.4 percent to $7.87 after itestimated first-quarter profit much below expectations.

Ciena Corp shares jumped 18.4 percent to $22.48after the company posted earnings that beat expectations andgave a revenue outlook above forecasts.

Trading volume was around 5.91 billion shares on U.S.exchanges, slightly above last month's average of 5.75 billion,according to data from BATS Global Markets.

(Reporting by Angela Moon; Editing by Nick Zieminski)

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