GLOBAL MARKETS-Stocks rally on bumper US jobs data

* US job growth smashes expectations

* Stocks jump, bond yields rise

* Global worries still weigh

By Jamie McGeever

LONDON, July 8 (Reuters) - Stocks jumped on Friday and U.S (Other OTC: UBGXF - news) . Treasury yields edged up from this week's record low after data showed that U.S. job growth accelerated rapidly in June, surpassing even the most optimistic of forecasts.

The U.S. economy added 287,000 jobs last month, according to the Labor Department, smashing the consensus forecast of 175,000, and wiping off the table any lingering expectations that the Federal Reserve might cut interest rates in the coming months.

European stocks extended gains to trade up 1.3 percent, and U.S. stock futures climbed to point to a rise of 0.8 percent at the open on Wall Street.

Still, the upbeat report failed to significantly alter the longer term outlook for U.S. interest rates, which are expected to be kept on hold for at least a year, according to Fed funds futures prices.

"Although the Fed will take encouragement from this, they simply aren't in a position to consider a rate hike at the moment," said Dennis de Jong, managing director of UFX.com.

"There is still huge uncertainty around the world, but the U.S. economy has at least taken a step in the right direction here," he said.

Europe's FTSEuroFirst 300 index of leading shares was up 1.3 percent at 1,293 points. Earlier, Asian shares ex-Japan lost 0.2 percent and Japan's Nikkei fell 1.1 percent.

The 10-year U.S. Treasury yield rose 5 basis points to 1.42 percent, moving further away from Tuesday's record low 1.321 percent.

However, worries over the world economy following Britain's vote to leave the European Union and a deepening crisis in Italian banks continue to cloud investor sentiment globally.

The first measure of UK consumer confidence since the Brexit referendum two weeks ago showed the joint-steepest decline in morale since 1994, according to research company GfK (Swiss: GFK.SW - news) on Friday.

News (Other OTC: NWSAL - news) that snipers killed five police officers during rallies in the U.S. city of Dallas to protest against the fatal shooting of two black men this week had also helped to keep markets in narrow ranges ahead of the non-farm payrolls report.

(Reporting by Jamie McGeever; Editing by Toby Chopra)