* S&P 500 erases earlier gains
* European shares gain after four days of losses
* Oil prices pare gains on likely profit-taking
* Strong European earnings reports boost region's shares
* U.S. benchmark yields hit more than 2-wk lows
* Dollar gains ahead of Friday's U.S. jobs data
(Updates to close of European markets, updates prices)
By Sam Forgione
NEW YORK, May 5 (Reuters) - U.S. shares erased earlier gains
on Thursday after oil prices eased from their highs, removing
some support from energy shares and risk appetite, while
benchmark Treasury yields hit more than two-week lows ahead of
the April U.S. employment report due Friday.
U.S. crude prices jumped by more than 5 percent before
paring gains, with a huge wildfire near Canada's oil sands
region and escalating tensions in Libya stoking concerns among
investors of a near-term shortage in supply. Traders said oil
prices likely gave back some gains on profit-taking.
The benchmark U.S. S&P 500 was mostly flat, while the S&P
energy index .SPNY gave back some gains but remained
0.6-percent higher. 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 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. The gains in European
shares came after four days of losses.
"The fact that oil started off strong today and has weakened
is probably a net negative for risk appetite in the near term,"
said Chris Konstantinos, head of international portfolio
management at RiverFront Investment Group in Richmond, Virginia.
MSCI's all-country world equity index .MIWD00000PUS , was
last down 0.3 percent, at 395.25.
The Dow Jones industrial average .DJI was last down 3.28
points, or 0.02 percent, to 17,647.98. The S&P 500 .SPX was
last down 0.05 points, or 0 percent, at 2,051.07. The Nasdaq
Composite .IXIC was off 0.77 points, or 0.02 percent, at
4,724.87.
Europe's broad FTSEurofirst 300 index .FTEU3 ended 0.32
percent higher, at 1,306.87.
Brent crude prices LCOc1 settled up 39 cents, or 0.87
percent, at $45.01 a barrel. U.S. crude settled up 54 cents, or
1.23 percent, at $44.32 a barrel CLc1 .
U.S. Treasury yields fell, with benchmark 10-year yields
US10YT=RR hitting their lowest level since April 18 of 1.745
percent as traders positioned for what they anticipated to be a
below-expectations U.S. jobs figure.
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. gold futures GCcv1 settled down 0.2 percent at
$1,272.30 an ounce.