* Investors rediscover risk appetite
* Dollar loses early strength vs yen
* Oil climb lifts stocks in U.S., Europe
(Updates with U.S. market close, oil settlement prices)
By Chuck Mikolajczak
NEW YORK, April 8 (Reuters) - Global equity markets advanced
on Friday, buoyed by a jump in oil prices, but were lower for
the week as the dollar gave up early gains against the yen.
Stocks on Wall Street and in Europe were lifted by energy
names, with Brent and U.S. crude oil jumping more than 6 percent
as drawdowns in U.S. crude stocks fed hopes a punishing global
glut that has persisted for nearly two years may be nearing a
tipping point.
Global benchmark Brent crude futures LCOc1 jumped 6.4
percent to settle at $41.94 per barrel, scoring their biggest
weekly gain in five. U.S. crude futures CLc1 closed up $2.46,
or 6.6 percent, to $39.72, up nearly 8 percent for the week.
The STOXX 600 Europe Oil and Gas .SXEP index was up more
than 3 percent while the S&P energy index .SPNY climbed 2
percent as the top-performing sectors in each region, tracking
the rise in crude prices.
"Clearly if you are looking at it from an index perspective,
the stronger commodities are having a bit of a positive effect,"
said Nick Kalivas, senior equity strategist at Invesco
PowerShares in Chicago.
"The market still remains very focused on energy as kind of
an indicator of economic health and credit risk that I don't
think has faded yet."
The Dow Jones industrial average .DJI rose 35 points, or
0.2 percent, to 17,576.96, the S&P 500 .SPX gained 5.68
points, or 0.28 percent, to 2,047.59 and the Nasdaq Composite
.IXIC added 2.32 points, or 0.05 percent, to 4,850.69.
Even with Friday's modest gains, the S&P 500 suffered its
biggest weekly decline in two months.
MSCI's index of world shares .MIWD00000PUS rose 0.68
percent but was down 0.55 percent for the week. The FTSEurofirst
300 closed up .FTEU3 1.2 percent, but still notched a fourth
straight weekly decline, its longest losing streak since October
2014.
Much of the volatility this week has been fueled by the
yen's surge against the dollar, which caught many market
participants off-guard and increased speculation Tokyo could
intervene in the currency market to halt the rally.
The dollar briefly traded above 109.00 yen JPY= ,
recovering from its first break below 108.00 since October 2014
on Thursday. Japanese Finance Minister Taro Aso said the
government would take steps to counter "one-sided" moves in the
yen in either direction.
However, those gains faded late in the session and the
dollar was last off 0.04 percent at 108.16 yen, for a weekly
fall of 3.1 percent.
Sharp appreciation of the safe-haven yen against the dollar
is often a warning sign of broader financial market stress and
investor risk aversion, which has been exacerbated this week by
growing uncertainty surrounding the U.S. economic and policy
outlook.
Federal Reserve Chair Janet Yellen, in a conversation with
former Fed chairmen on Thursday, said the U.S. economy is on a
solid course and still on track to warrant further interest rate
hikes.
New York Fed President William Dudley on Friday said the
central bank must approach further rate hikes cautiously and
gradually because of lingering external risks to the U.S.
economy, despite some strength at home and welcome hints of
inflation.
The comments helped push benchmark 10-year Treasuries
US10YT=RR down 9/32 in price to yield 1.784 percent after they
hit a low six-week of 1.685 percent on Thursday. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets in 2016 http://link.reuters.com/dub25t
Commodities performance http://link.reuters.com/rac73w
Currencies vs dollar http://link.reuters.com/tak27s
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(Editing by Bernadette Baum and Dan Grebler)