* U.S. stocks reverse loss, gain on UK-Lloyds report
* Dollar falls vs euro as job losses not as bad as feared
* Gold rises on safety bid, U.S. bonds fall on issuance
* Oil rise on weaker dollar, expectations of OPEC cut (Adds close of U.S. markets)
By Herbert Lash
NEW YORK, March 6 (Reuters) - U.S. stocks rebounded in a late-day surge on Friday on a report that Lloyds had agreed to a British asset protection program, while oil surged on a potential OPEC output cut.
Crude settled more than 4 percent higher as expectations the Organization of Petroleum Exporting Countries could reduce output again outweighed a weak U.S. jobs report that initially sent investors scurrying to safe havens. For details, see [ID:nSP482596]
The dollar fell against the euro, with investors emboldened to lock in recent gains and pare safe-haven currency trades after some investors decided the U.S. job losses were not as severe as many had feared. [ID:nN06587597]
Because the jobs number was largely in line with consensus estimates, a semblance of risk appetite returned "so the dollar has come off against the euro," said Richard Franulovich, senior currency strategist at Westpac Banking Corp in New York.
U.S. Treasury debt prices fell as the prospect of $63 billion in new issuance next week weighed, although bonds losses were checked by safe-haven bids as stocks were headed toward their worst week since a massive sell-off in October. [ID:nN06418676]
A Wall Street Journal report that the UK government and
Lloyds Banking Group
The report on Lloyds spurred bargain-hunting, said Giri Cherukuri, head trader at OakBrook Investments LLC, which oversees $1.3 billion in Lisle, Illinois.
The report "is more positive news that maybe things are getting cleaned up. I think it's temporary, but it's just incremental news to help the market," Cherukuri said.
Some analysts said the agreement might presage progress in U.S. efforts to bolster the banking system.
"You never know what Congress is going to do," said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital Markets in Baltimore.
Banking stocks cut losses of more than 5 percent to close down 1.4 percent, according to the S&P financial index <.GSPF>.
In Europe, banks and insurers were the day's worst losers.
Shares of automaker General Motors
The Dow Jones industrial average <.DJI> closed up 32.50 points, or 0.49 percent, at 6,626.94. The Standard & Poor's 500 Index <.SPX> gained 0.83 points, or 0.12 percent, at 683.38. The Nasdaq Composite Index <.IXIC> closed down 5.74 points, or 0.44 percent, at 1,293.85.
Earlier, world stocks hit a six-year low <.MIWO00000PUS> and the S&P 500 index plumbed fresh 12-year lows as it headed for its worst weekly decline since October before turning higher. The slide had unnerved investors.
"I've been in the business since 1963 and I've truthfully never seen a market that is so discouraging or painful. I've been through a lot but this is the worst I've seen. I'm glad it's Friday," said Carl Birkelbach, chief executive of Birkelbach Investment Securities in Chicago.
The Nasdaq was pulled to a 6-year intraday low on a 4
percent slide in Apple Inc
The FTSEurofirst 300 <.FTEU3> index of top European shares closed down 1.3 percent at 662.13 points, a lifetime low for the 12-year-old gauge. The Nikkei <.N225> lost 3.5 percent, less than 200 points above a 26-year low hit last October.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> down 0.49 percent at 88.643.
Against the yen, the dollar
The euro
The benchmark 10-year U.S. Treasury note
U.S. crude
U.S. gold futures for April delivery
(Reporting by Leah Schnurr, John Parry, Steven C. Johnson and George Matlock, Sitaraman Shankar and Jan Harvey in London; writing by Herbert Lash; Editing by Dan Grebler)