* U.S. stocks mostly lower in late afternoon trading
* European shares end lower; eyes on Thursday ECB meeting
* U.S. bond yields rise on jobs momentum, govt supply
(Updates with closing crude oil prices)
By Caroline Valetkevitch
NEW YORK, March 7 (Reuters) - Brent oil prices shot above
$40 a barrel on Monday to their highest level since December
after data showed a smaller-than-expected U.S. build in crude
stockpiles, while technology shares weighed on U.S. equities.
Brent LCOc1 gained $2.12, or 5.5 percent, to settle at
$40.84 and U.S. crude CLc1 rose $1.98, or 5.5 percent, to
settle at $37.90. Traders said investors were rotating more
assets into raw materials amid talk OPEC producers want a higher
anchor price after a selloff that has lasted nearly two years.
In other commodities markets, spot iron ore prices jumped 19
percent, helped by expectations that Chinese steel mills were
planning production cuts.
The gains in oil lifted U.S. energy shares, though the
benchmark S&P 500 was down slightly in late afternoon trading as
a drop in technology shares .SPLRCT more than offset energy's
.SPNY 1.9-percent advance.
"Money flows from broader financial markets are powering
this broader rally in oil," said Scott Shelton, energy broker
with ICAP (LON:IAP) in Durham, North Carolina. "I don't think the energy
fundamentals for the next few days are going to matter much as
the market is making a transition."
The Dow Jones industrial average .DJI was up 12.91 points,
or 0.08 percent, to 17,019.68, the S&P 500 .SPX lost 5.95
points, or 0.3 percent, to 1,994.04 and the Nasdaq Composite
.IXIC dropped 34.28 points, or 0.73 percent, to 4,682.75.
U.S. stocks have posted gains in each of the last three
weeks, thanks in part to the rebound in oil prices, after a
steep selloff at the start of the year.
MSCI's all-country world stock index .MIWD00000PUS edged
up 0.01 percent. In Europe, the pan-regional FTSEurofirst 300
index .FTEU3 closed down 0.3 percent.
The dollar fell, wiping out its initial gains, as the oil
rally kindled bids for riskier euro and commodity-sensitive
currencies. The euro's gains were limited by the view the
European Central Bank would embark on more stimulus to support
the euro zone's fragile economic recovery at its policy meeting
on Thursday.
The euro was up 0.15 percent at $1.1017 EUR= . The U.S.
dollar index .DXY was down 0.2 percent.
In the U.S. bond market, U.S. Treasury yields rose in
volatile trading as traders increased bets the Federal Reserve
will raise interest rates this year in the wake of a strong
February jobs report and ahead of a ECB meeting.
The benchmark 10-year note's yield US10YT=RR rose to 1.918
percent, its highest in just over a month. It was last down 6/32
in price to yield 1.902 percent, up from 1.883 percent late
Friday.