GLOBAL MARKETS-Economic optimism lifts stocks, dollar down

* Signs of economic recovery help Dow hold above 10,000

* Goldman, Citi post strong, not spectacular, earnings

* Dollar ends lower after investors exit safe trades (Recasts lead; updates with U.S. markets close)

By Jennifer Ablan

NEW YORK, Oct 15 (Reuters) - Solid U.S. economic data and robust earnings fueled investor appetite for risk on Thursday, boosting global stocks but sending the dollar lower.

Optimism was pumped up after the Dow Jones industrial average <.DJI> hit the psychologically important 10,000 level on Wednesday, the first time in a year. After see-sawing around that level for much of Thursday, investors snapped up stocks during the last half hour of trading to send the Dow Jones industrial up 47.08 points, or 0.47 percent, at 10,062.94.

The Standard & Poor's 500 Index <.SPX> was up 4.54 points, or 0.42 percent, at 1,096.56. The Nasdaq Composite Index <.IXIC> was up 1.06 points, or 0.05 percent, at 2,173.29.

Investors were heartened by signs that stabilization in the labor market was taking hold. The number of U.S. workers filing new claims for jobless insurance unexpectedly fell last week to the lowest since January, according to a government report on Thursday that hinted at stabilization in the labor market.

For story see [ID:nN14260021], for table [ID:nOAT002318]

"Another decline in jobless claims strongly suggests that the worst for employment conditions have now passed," said Tom Sowanick, co-president and chief investment officer at Omnivest Group LLC in Princeton, New Jersey. "That is giving many investors comfort that we are on the path of economic recovery."

Goldman Sachs Group , the New York-based investment bank, earlier set the soft tone for markets. Goldman reported third-quarter profit that nearly quadrupled and topped expectations. However, its shares fell on disappointment that so much of the profit came from trading gains that might not be sustainable. [ID:nN15288862]

"There were all sorts of rumors flying around that the results were going to be even stronger than consensus, so the initial reaction is that they've slightly disappointed despite beating estimates significantly," said Rupert Armitage of Shore Capital Stock Brokers in London.

Citigroup Inc also reported better-than-expected results, but it was still a loss. [ID:nN15291217]

Energy companies Exxon Mobil Corp and Chevron Corp , however, gained at least 1.5 percent as crude jumped above $77 a barrel. U.S. light sweet crude oil rose $2.36, or 3.14 percent, to $77.54 and spot gold prices fell $12.55, or 1.18 percent, to $1,049.40 an ounce. The Reuters/Jefferies CRB Index <.CRB> was up 3.79 points, or 1.4 percent, at 273.72.

World stocks as measured by MSCI <.MIWD00000PUS> were up 0.36 percent to 298.49, at its year high.

Japan's Nikkei <.N225> closed up 1.8 percent and the FTSEurofirst 300 was up a smidgen, 0.1 percent, to 1,017.26.

Bank of America Merrill Lynch said on Wednesday their monthly survey of fund managers had shown increasing bullishness but had not reached the level yet that risked a sharp counter swing.

"Fears of a double dip have receded, while worries about inflation and monetary tightening are not imminent enough to prevent an October surge in risk appetite," Michael Hartnett, the bank's chief global equity strategist, said in a note to clients.

STOCKS SUCK WIND OUT OF DOLLAR

Not coincidentally, the dollar moved in sympathy with stocks all day, settling lower by close as investors exited safer trades on optimism the U.S. economy is recovering.

The greenback was down against a basket of major trading-partner currencies, with the U.S. Dollar Index <.DXY> down 0.16 percent at 75.429 from a previous session close of 75.551.

The euro was up 0.05 percent at $1.4932 from a previous close of $1.4924. The dollar was up 1.32 percent at 90.60 yen from a previous session close of 89.420.

U.S. Treasury debt prices also fell. The benchmark 10-year U.S. Treasury note was down 13/32, with the yield at 3.47 percent, while the 2-year U.S. Treasury note was down 2/32, with the yield at 0.96 percent. At the longer end of the yield curve, the 30-year U.S. Treasury bond was down 22/32, with the yield at 4.31 percent. (Additional reporting by Jeremy Gaunt and David Brett in London; Editing by James Dalgleish)