The dollar fell against the yen on Friday after a government report showing a slower-than-expected contraction in the U.S. economy in the second quarter was offset by a decline in consumer spending.

That prompted investors to shun risk and weighed on U.S. stock futures. The euro also pared gains versus the dollar after the report.

The U.S. economy contracted at a 1.0 percent rate in the second quarter, according to government data on Friday. Analysts polled by Reuters had forecast GDP falling at a 1.5 percent rate.

Despite the fact GDP fell less than expected, investors focused on the consumer spending component, which showed a 1.2 percent drop after a 0.6 percent rise the previous quarter.

Consumer spending accounts for over two-thirds of U.S. economic activity.

“The better-than-expected number seems to be offset by a renewed decline in consumer spending,” said Ashraf Laidi, chief market strategist at CMC Markets in London.

“This report has written all

GLOBAL MARKETS-Stocks, crude surge as profits, data spur rally

Wall Street rallies on solid profits, recovery hopes

Oil jumps as economic data raises economic recovery hope

* Dollar slips as risk sentiment improves

By Herbert Lash

NEW YORK, July 30 - Global stocks rallied and oil surged more than 5 percent on Thursday as solid corporate results worldwide and encouraging economic data boosted sentiment that had turned skittish earlier in the week.

Commodity prices jumped, with the Reuters-Jefferies CRB index <.CRB> of 19 commodities rising 3.9 percent, its biggest daily gain since March, after a two-day sell-off.

And Long-dated U.S. Treasury bonds rebounded as fears about the appetite for U.S. government debt eased after robust demand for $28 billion in new seven-year notes. ID:[nN30286312]

U.S. equity gains were broad-based, with the Standard & Poor’s 500 Index <.SPX> hitting an almost nine-month intraday high that was less than 4 points below the key 1,000 mark. The S&P closed up

Alcoa Inc. (NYSE: AA) reported a lower-than-expected second-quarter loss on Wednesday, the first in what is projected to be a lackluster season for U.S. corporate earnings.

Alcoa reported a loss of $312 million, or 32 cents a share, well ahead of analysts’ estimates of a loss of 38 cents a share – but down from its year-ago profit of 66 cents per share. The giant aluminum producer is the first component of the bellwether Dow Jones Industrial Average to report its second-quarter performance, marking the beginning of the U.S. corporate earnings season.

Overall, earnings expectations are bleak. The companies that make up the Standard & Poor’s 500 Index are expected to post declining profits for the eighth consecutive quarter, a 36% decline, according toThompson Reuters.

Alcoa’s performance was a result of cost-cutting measures undertaken by the company.

“At first glance it looks constructive. They were able to

U.S. stocks fell today, Monday, as investors worried about the potential strength and timing of an economic recovery, sending oil prices and energy shares lower.

Markets briefly cut losses after data showed the service sector contracted at a slower pace in June, blunting some pessimism over the economy after a last week’s much worse-than-expected jobs report.

“Overall the data looks like a positive, although it may not be enough in the near term to overcome last week’s disappointing jobs report,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

Oil touched a five-week low and fell to around $64 a barrel, sending Exxon Mobil Corp down 2.1 percent at $67.05, and Chevron Corp fell 2.1 percent to $63.09. The two companies were the biggest weights on the Dow Jones industrial average.

Although the weaker oil prices bode well for recession-weary consumers, strong commodity prices have been viewed as a signal the global economy

In the currency market, the dollar was marginally lower against the euro. Late Monday, the euro was trading at $1.4078 vs. $1.4068 on Friday.

“The U.S. dollar has started the week a touch firmer, with renewed concerns over the global recovery helping the greenback ahead of a busy week” of economic data, wrote strategists at Brown Brothers Harriman.

With the July 4th weekend ahead, the Labor Department will release the closely-watched tally of non-farm payroll losses a day early, on Thursday. Economists are projecting a net loss of about 325,000 jobs in June. Any strong variance from that figure is likely to have repercussions.

But if there are further indications that the ‘green shoots’ scenario is correct, will that necessarily have a positive effect on the buck? Many doubt it, even though a strengthening economy should portend a stronger greenback.

However, “The past seven years have proven each time U.S. data emerged on

In the currency market, the dollar lost ground to the euro. Late Thursday, the euro was trading at $1.3991 vs. $1.3926 on Wednesday.

“Equity and commodity markets advanced, encouraging rotation out of the greenback,” said analysts at Action Economics.

Also noted was that, “The dollar has been driven over the last two days by central bank activity. One is the Swiss National Bank, which appears to be continuing its buying of dollars,” said Meg Browne, a currency analyst at Brown Brothers Harriman.

The Swiss National Bank is publicly committed to stemming any haven-related appreciation in the franc, but as to what it may be doing, said that it doesn’t comment on intervention rumors.

However, the franc’s strength has proven “increasingly self-sustaining,” says Ashraf Laidi, chief market strategist at CMC Markets in New York. It has attracted support because of “broadening risk aversion, short-lived dollar strength and emerging doubts” about euro-zone banks,” Laidi said.

The