Investors cheer data, U.S. to push reforms this year

By John O'Callaghan

WASHINGTON (Reuters) - Signs the global downturn may be easing grew on Friday with U.S. jobs and German exports data, as Washington looked set to push tighter financial rules this year now that "stress tests" on U.S. banks are done.

Investors around the world took heart after U.S. regulators ordered 10 of the country's 19 biggest banks on Thursday to raise nearly $75 billion of capital -- less than some analysts had estimated -- to bolster themselves against further shocks.

In the next step, U.S. President Barack Obama's team plans to propose legislation to Congress by June calling for the Federal Reserve to regulate "systemic risk" in the economy, three trade association sources said.

Lawrence Summers, a senior adviser to Obama, was expected to lead the regulatory restructuring amid a commitment to enact reforms into law this year, said the sources, based on a briefing by administration officials.

After the results of the stress tests were made public, three U.S. banks sold shares and debt on Friday to shore up their financial foundations.

"There are a whole lot of hungry banks stepping up to the banquet table. They know if they're not first in line, there might not be any shrimp left on the table for them," said Brad Hintz, an analyst at Sanford C. Bernstein.

Hints of improvement in the recession-hit U.S. economy came from data showing employers cut 539,000 jobs in April -- the smallest number since October and fewer than economists had forecast in a Reuters poll.

But the U.S. Labor Department said the unemployment rate soared to 8.9 percent, the highest since September 1983.