GLOBAL MARKETS-Stocks, dollar rally on bumper U.S. jobs data

* Non-farm payrolls jump 255,000 vs 180,000 forecast

* Data supports case for Fed rate hike this year

* Wall St shares jump, financials lead gains

* European shares lifted by solid earnings

* Dollar rallies, drags oil and gold lower (Updates to U.S (Other OTC: UBGXF - news) . trading, changes byline, dateline previous LONDON)

By Saqib Iqbal Ahmed

NEW YORK, Aug 5 (Reuters) - Stocks and the dollar jumped on Friday as investors cheered strong U.S. employment data, which bolstered expectations of an acceleration in economic growth and raised the probability of a Federal Reserve interest rate hike this year.

Forecast-beating U.S. non-farm payrolls numbers, coming a day after the launch of a new Bank of England monetary easing package, sent U.S. Treasury yields higher.

MSCI (NYSE: MSCI - news) 's world stocks index, which tracks shares in 45 countries, was up 0.41 percent, on pace for a second day of gains.

Nonfarm payrolls rose by 255,000 jobs in July as hiring increased broadly after an upwardly revised 292,000 surge in June, the U.S. Labor Department said. Economists had expected a rise of 180,000.

"It (Other OTC: ITGL - news) looks like a pretty strong report overall. It shows the economy from a labor perspective is heading in the direction that the Fed wants," said Doug Duncan, chief economist at Fannie Mae in Washington.

"It gives the Fed some support for those looking for an increase in rates by the end of the year."

After the jobs data, futures contracts showed traders still saw less than even odds of a rate hike this year, but close to even odds of such a move by early 2017. Ahead of the employment report, traders saw little chance of a rate increase until well into next year.

The S&P 500 hit a record intra-day high with financials, which benefit form rising interest rates, leading gains.

The Dow Jones industrial average rose 143.58 points, or 0.78 percent, to 18,495.63, the S&P 500 gained 14.14 points, or 0.65 percent, to 2,178.39 and the Nasdaq Composite added 51.88 points, or 1 percent, to 5,218.13.

The S&P financial sector was up 1.5 percent.

Europe's broad FTSEurofirst 300 index was up 0.73 percent at 1,341.37, helped by solid earnings from companies including cement making group LafargeHolcim (LSE: 0QKY.L - news) .

The dollar rallied across the board, hitting one-week peaks against the euro and the Swiss franc and turning positive versus the yen after the jobs data.

The dollar index, which tracks the greenback against six major currencies, was up 0.65 percent to 96.382.

The rallying dollar dragged commodities, including gold and oil, lower.

Gold (Other OTC: GDCWF - news) is highly sensitive to rising U.S. interest rates, which lift the opportunity cost of holding the non-yielding asset while boosting the dollar, in which it is priced.

Spot gold prices were down 1.7 percent to $1,337.70 an ounce, on pace for the worst drop in more than three weeks.

Oil's two-day rally, fueled by short-covering and bargain-hunting, fizzled as investors focused on oversupplies.

Brent crude was down 1.42 percent at $43.66 a barrel, while U.S. crude was down 1.69 percent at $41.23.

In bond markets, U.S. Treasury yields jumped, with three-year yields hitting one-week highs, while other yields rose but remained within ranges set in recent sessions.

The rise in yields for U.S. government bonds, which provide higher yields compared to low or negative ones in other countries, likely led some traders to step in and buy, keeping a lid on gains, analysts said.

"We are kind of in a yield-starved environment globally," said Mark Cabana, head of U.S. short rates strategy at Bank of America Merrill Lynch in New York.

"We may be seeing some folks coming in and buying."

U.S. 30-year Treasuries prices were last down 14/32 to yield 2.276 percent, from a yield of 2.255 percent late on Thursday.

Benchmark 10-year prices were down 13/32 to yield 1.547 percent, from a yield of 1.502 percent late on Thursday. (Reporting by Saqib Iqbal Ahmed; Additional reporting by Sam Forgione in New York and Lucia Mutikani in Washington; Editing by Meredith Mazzilli)