(Updates to U.S. open, adds comments, changes byline, previous dateline LONDON)
* U.S. job growth accelerates, wages lag
* Wall Street rises, oil falls on oversupply worries
* Bond yield spike ruffles European stocks
By Sinead Carew
NEW YORK, July 7 (Reuters) - Wall Street stocks rose on Friday along with the U.S. dollar and Treasury yields after data showed stronger-than-expected U.S. jobs growth but wage increases missed forecasts.
Meanwhile oil prices erased previous-day gains after a report showed U.S. production rose last week just as OPEC exports hit a 2017 high, casting doubt on efforts to curb oversupply. O/R
Treasury yields and the dollar rose after falling right after the data was released as investors tried to figure out how the mix of strong jobs and weak wage growth would influence the U.S. Federal Reserve's plans for a rate hike or balance sheet reduction. bond market has already priced in an extremely slow Fed ... It's not massively altering its course based on this report because it's kind of a mixed bag report," said Shyam Rajan, head of U.S. rates strategy at Bank of America Merrill Lynch (NYSE:BAC) in New York.
While Wall Street's S&P 500 .SPX was on track for a weekly decline, equities rose on Friday as investors were reassured after weaker-than-expected private jobs numbers the day before.
"It definitely seems the economy is on firm footing and this is a nice solid report so we can look forward to earnings season coming up," said Ryan Detrick, senior market strategist for LPL Financial. "After yesterday's big selloff this is kind of a relief."
The Dow Jones Industrial Average .DJI rose 87.7 points, or 0.41 percent, to 21,407.74, the S&P 500 .SPX gained 14.04 points, or 0.58 percent, to 2,423.79 and the Nasdaq Composite .IXIC added 59.93 points, or 0.98 percent, to 6,149.39.
Bets that some of the world's major central banks are moving closer to unwinding ultra-loose monetary policies have roiled markets this week as European Central Bank minutes showed policymakers are open to tightening. pan-European FTSEurofirst 300 index .FTEU3 lost 0.21 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.10 percent.
The U.S. dollar was up 0.3 percent against a basket of currencies .DXY and on pace to post its largest weekly percentage gain since late April. greenback rose to two-month highs against the yen after the Bank of Japan increased its bond buying, expanding monetary policy when other central banks are moving to tighten.
"We view today's report as supportive of the Fed view that they can hike an additional time later this year, while starting to reduce the balance sheet in the fall," said Marvin Loh, senior global markets strategist at BNY Mellon in Boston.
U.S. Treasuries were up after a Fed monetary policy report to Congress release in late morning. 10-year notes US10YT=RR last fell 7/32 in price to yield 2.3927 percent, from 2.369 percent late on Thursday.
The 30-year bond US30YT=RR last fell 21/32 in price to yield 2.9359 percent, from 2.904 percent late on Thursday.
In Europe, German government bond yields rose to 18-month highs and lifted the euro EUR= but weighed on stocks.
U.S. crude CLcv1 fell 3.19 percent to $44.07 per barrel and Brent LCOcv1 was last at $46.57, down 3.2 percent on the day.