* Wall Street up as investors chase winning stocks
* Euro gains versus dollar on rate outlook
* Yen hits 10-month low against euro
* Oil and copper close lower (Updates prices)
By Barani Krishnan
NEW YORK, March 30 (Reuters) - Stocks on major world markets rose on Wednesday as data showing strong hiring by U.S. private employers provided a boost, while the euro gained against the U.S. dollar on remarks by a European policymaker indicating higher eurozone interest rates ahead.
U.S. stocks ended higher, with activity dominated by money managers buying recent winners, including energy and small-caps, as the quarter nears its end. But volume remained thin and the S&P 500 index failed to hold above the key 1,330 level.
"A lot of what you're seeing for the entire week is everybody wanting to be either in or out of whatever they want to show their clients for quarter-end," said Neal Dietz, managing director at Dietz & Lynch Capital in Newburyport, Massachusetts.
A report by ADP that U.S. private sector businesses added 201,000 jobs in March buoyed expectations about the pace of economic recovery in the United States, the world's largest economy, and gave stocks on Wall Street an early boost.
MSCI's all-country world stock index <.MIWD00000PUS> gained more than 1.0 percent while European shares hit a three-week closing high.
EURO JUMPS
In currency markets, the euro hit a 10-week high against the yen. It also rose against the dollar, erasing early losses, after European Central Bank policymaker Lorenzo Bini Smaghi said the ECB intends to raise rates gradually, suggesting next week's expected hike may be the first of several. For more, see: [ID:nLDE72T1ZS]
The euro hit $1.4147
The Australian dollar rallied too, surging to levels last seen in the early 1980s.
The Japanese yen slipped to a 10-month low versus the euro and a near three-month low against the dollar as recent hawkish comments from euro zone and U.S. officials on interest rates contrasted with Japan's loose monetary policy stance.
The yen fell against the euro to 117.28 yen, and against
the U.S. dollar it fell to 83.19 yen
Rising risk appetite encouraged investors to seek
higher-yielding assets, with the Australian dollar
Graphic on year-to-date gains across asset classes:
http://r.reuters.com/kyw48p ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
WALL STREET HELPED BY JOBS REPORT, MERGERS
The Dow Jones industrial average <.DJI> ended up 71.60 points, or 0.58 percent, at 12,350.61. The Standard & Poor's 500 Index <.SPX> was up 8.82 points, or 0.67 percent, at 1,328.26. The Nasdaq Composite Index <.IXIC> added 19.90 points, or 0.72 percent, to 2,776.79.
The Russell 2000 index <.RUT> for small-caps closed at the highest level since October 2007.
The ADP report on U.S. private sector jobs -- showing 201,000 new jobs -- came ahead of Friday's government report on non-farm payrolls. While it indicated the economy is on the mend, the job numbers themselves were not overly bullish. [ID:nN30275708]
"At 200,000 or so, that number is not enough to excite the market one way or the other -- if it indeed happens to be the number for payrolls on Friday," said John Canally, an economist for LPL Financial in Boston.
Merger and acquisition activity also supported sentiment
after Canadian drugmaker Valeant Pharmaceuticals International
"M&A activity has been very consistent over a broad array of sectors with incredible premiums, and that's one of the biggest catalysts for the market's rebound," said Alan Lancz, president at Alan B. Lancz & Associates Inc, an investment advisory firm based in Toledo, Ohio.
The pan-European FTSEurofirst 300 <.FTEU3> index of top shares closed up 0.8 percent at 1,134.63, its highest closing level since March 9.
"We have worked through the oversold conditions and technically the markets are in a very strong and favorable condition to respond to good newsflow. If we do get good non-farm payrolls, the market will do very very well," said Mike Lenhoff, chief strategist at Brewin Dolphin.
COMMODITIES DOWN
U.S. crude oil
Copper, an industrial metal seen as an economic bellwether,
fell almost 2 percent as investors worried about lack of demand
from top buyer China. Copper's benchmark U.S. futures contract,
May
"They are selling commodities, they are moving back into industrials," said Paul Mendelsohn, a stock market analyst and chief investment strategist at Windham Financial Services in Charlotte, Vermont. "You've got a mini-market rotation coming into your final couple of days of the quarter, and that is the way the window-dressing takes place." (Additional reporting by Nick Olivari and Chuck Mikolajczak in New York; and Ikuko Kurahone, Natsuko Waki, Atul Prakash and Joanne Frearson in London; Editing by Dan Grebler)