GLOBAL MARKETS-Oil jumps on Middle East worry; U.S. stocks advance

* European shares slide after soft PMIs

* Oil rises on Middle East concern

* Energy shares, earnings lift U.S. stocks

(Adds close of European markets)

By Chuck Mikolajczak

NEW YORK, April 23 (Reuters) - Oil prices climbed to their

highest levels of the year on Thursday as tensions in the Middle

East sparked supply concerns, while the boost from

energy-related stocks helped U.S. equities shrug off a batch of

soft economic data.

Brent crude touched a high of $65.13, its highest

since December, and was last up 3.6 percent at $64.97 a barrel,

while U.S. crude jumped 3.1 percent to $57.92 after Saudi

Arabia and its allies continued a bombing blitz in Yemen that

raised concerns about the security of Middle East oil supplies.

A 1.2 percent rise in energy shares helped boost

U.S. equities, with the Nasdaq above its record closing high of

5,048.62. Strong earnings from AT&T (Sao Paolo: ATTB34.SA - news) , up 4.2 percent to

$34.25, and eBay, up 3.3 percent to $58.65, also helped

offset a round of lackluster domestic economic data.

"Oil prices are going to continue to remain somewhat

volatile, although if you look over the last three or four

weeks, what has changed in terms of fundamentals is we have seen

U.S. production start to level off," said David Lefkowitz,

senior equity strategist at UBS Wealth Management Americas in

New York.

"Now (NYSE: DNOW - news) we are still oversupplied in the near term but the

market is beginning to see the light at the end of the tunnel in

terms of a better balance between supply and demand."

The Dow Jones industrial average rose 83.56 points,

or 0.46 percent, to 18,121.83, the S&P 500 gained 10.4

points, or 0.49 percent, to 2,118.36 and the Nasdaq Composite

added 24.21 points, or 0.48 percent, to 5,059.38.

European shares slipped, with Germany's DAX index

underperforming following a disappointing purchasing managers'

survey, while weak results from Ericsson (Xetra: ERCA.DE - news) hit

technology stocks.

Overall, euro zone private-sector business growth was weaker

than forecast, despite help for exporters from a big fall in the

euro and the March launch of a sovereign bond-buying program by

the European Central Bank.

MSCI (NYSE: MSCI - news) 's all-country world index of equity

performance in 46 countries advanced 0.56 percent, while the

FTSEurofirst 300 index of top European shares closed

down 0.46 percent at 1,620.82. Germany's DAX dropped

1.2 percent.

U.S. Treasuries yields were little changed on Thursday with

benchmark yields hovering near 3-1/2 week highs after a broad

selloff in Treasuries, German Bunds and British Gilts on

Wednesday.

Benchmark 10-year notes were last up 4/32 in

price to yield 1.9577 percent.

The dollar weakened 0.7 percent against a basket of

major currencies in light of the soft U.S. data and waning fears

of a Greek default.

German Chancellor Angela Merkel was expected to tell

Greece's prime minister in a meeting on Thursday that she wants

to keep Greece in the euro zone and avoid a default, but will

need commitments in technical talks on measures to make public

finances sustainable.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski and

Meredith Mazzilli)