* S&P 500 gains after two days of losses
* European shares gain after four days of losses
* Oil prices rally 3 percent, boosting shares
* Strong European earnings reports boost region's shares
* Dollar gains ahead of Friday's U.S. jobs data
(Updates to open of U.S. markets; changes byline, dateline, pvs
LONDON)
By Sam Forgione
NEW YORK, May 5 (Reuters) - U.S. and European stock markets
recovered on Thursday after a rebound in oil prices boosted
energy shares, with some strong European earnings reports also
supporting stocks in the region, while the dollar rose ahead of
Friday's U.S. employment data.
Oil prices jumped 2 percent as a huge wildfire near Canada's
oil sands region and escalating tensions in Libya stoked
concerns among investors of a near-term shortage in supply.
The rally in crude prices helped lift the S&P energy index
.SPNY 1.4 percent, making it the lead gainer among the 10
major S&P sectors. Investors awaited monthly jobs data on
Friday, which is expected to show nonfarm payrolls likely rose
by 202,000 in April and the unemployment rate held at 5 percent.
Firmer oil prices also lifted shares of major European oil
producers, while encouraging European earnings updates from
firms including telecoms group BT BT.L and oil company Repsol
REP.MC helped prop up the stock market.
Thursday's gains in the S&P 500 stock index came after two
straight days of losses, while the gains in European shares came
after four days of losses.
"What we're seeing is a bit of a relief rally from oversold
levels," said Adam Sarhan, chief executive of Sarhan Capital in
New York.
MSCI's all-country world equity index .MIWD00000PUS was
last down 0.24 points, or 0.06 percent, at 395.99.
The Dow Jones industrial average .DJI was last up 49.38
points, or 0.28 percent, at 17,700.64. The S&P 500 .SPX was
last up 4.74 points, or 0.23 percent, at 2,055.86. The Nasdaq
Composite .IXIC was last up 8.53 points, or 0.18 percent, at
4,734.17.
Europe's broad FTSEurofirst 300 index .FTEU3 was last up
0.31 percent at 1,306.8.
Brent crude LCOc1 was last up 89 cents, or 1.99 percent,
at $45.51 a barrel. U.S. crude CLc1 was last up $1.05, or 2.4
percent, at $44.83 per barrel.
The U.S. dollar rose against a basket of currencies for a
third day as traders closed out profitable bets against the
greenback before Friday's U.S. jobs report.
The dollar index .DXY , which measures the greenback's
value versus six currencies, rose to its highest level in a week
of 93.862 after falling to its lowest in over 15 months on
Tuesday of 91.919.
The dollar also rose against the yen JPY= to a six-day
high of 107.49 yen after hitting an 18-month low on Tuesday of
105.52 yen.
"We are seeing some short covering lifting the dollar
against most major currencies," said Ron Simpson, director of
currency research at Action Economics in Tampa, Florida. "You
can largely attribute it to tomorrow's nonfarm payrolls report."
U.S. Treasury yields were little changed as the number of
Americans filing for unemployment benefits rose unexpectedly but
remained within the range of a strong labor market, leaving
investors with no clear signals ahead of the U.S. jobs report.
Benchmark 10-year U.S. Treasury yields US10YT=RR were last
at 1.78 percent.
Spot gold prices XAU= fell $2.51 or 0.20 percent, to
$1,276.60 an ounce.