* September U.S. rates "liftoff" back on table
* Oil rises for second day after U.S. inventories fall
* Dollar index at highest since April
(Adds U.S. market open, byline, dateline, previous LONDON)
By Herbert Lash
NEW YORK, Aug 5 (Reuters) - The dollar rose on Wednesday
after data showed the pace of growth in the U.S. service sector
surged in July to its best level in a decade, helping lift
stocks on Wall Street while solid corporate earnings pushed
equities higher in Europe.
Led by sharp increases in business activity, employment and
new orders, the Institute for Supply Management's services
sector index rose to 60.3, its highest reading since August
2005, beating expectations of 56.2.
The dollar rebounded on the ISM data, which supported views
the Federal Reserve would raise interest rates in September.
Weaker-than-expected July private hiring figures released
earlier in the day had briefly raised doubts about a rate hike
next month.
"For most people watching the market, whether it's September
or December isn't that critical, most people are assuming it
will happen this year. They've already factored that in to the
way they look at the market," said Rick Meckler, president of
hedge fund LibertyView Capital Management LLC in Jersey City,
New Jersey.
The dollar also gained after Atlanta Fed President Dennis
Lockhart, regarded as one of the Federal Open Market Committee's
centrist policymakers, put September back on the table for the
first U.S. rate hike in almost a decade.
The dollar rose to a two-month high against the yen, and
strengthened against other major currencies. The dollar index
.DXY erased earlier losses and was up 0.14 percent at 98.071.
Against the euro EUR= , the dollar was up 0.13 percent at
$1.0866. The greenback was up 0.39 percent at 124.87 yen JPY= .
The Dow Jones industrial average .DJI rose 96.08 points,
or 0.55 percent, to 17,646.77. The S&P 500 .SPX gained 17.79
points, or 0.85 percent, to 2,111.11 and the Nasdaq Composite
.IXIC added 69.58 points, or 1.36 percent, to 5,175.13.
Stocks gained more than 1 percent in Europe, with the
pan-European FTSEurofirst 300 index .FTEU3 up 1.24 percent at
1,600.57. MSCI's all-country world stock index .MIWD00000PUS
rose 0.44 percent.
Societe Generale SOGN.PA shares jumped 8.9 percent after
the French bank became the latest major European company to post
forecast-beating earnings, while regional carmakers .SXAP ,
which fell in late July on concerns about a slowdown in the
Chinese market, also rallied.
U.S. Treasuries prices fell after the strong ISM report.
The benchmark 10-year U.S. Treasury note fell 17/32 in price
to yield 2.2736 percent
Oil prices edged higher for a second day, recovering from a
drop below $50 a barrel, after weekly data showed a fall in U.S.
crude inventories, though a stronger dollar tempered gains.
September Brent crude futures LCOc1 rose 35 cents to
$50.34 a barrel. U.S. crude for September delivery CLc1 gained
13 cents to trade at $45.87 a barrel.
(Editing by Larry King and Meredith Mazzilli; To read Reuters
Global Investing Blog click on http://blogs.reuters.com/globalinvesting;
for the MacroScope Blog click on http://blogs.reuters.com/macroscope;
for Hedge Fund Blog Hub click on http://blogs.reuters.com/hedgehub)