* World stock index back in black year-to-date
* Dollar weaker
* Wall Street set to open flat
By Jeremy Gaunt, European Investment Correspondent
LONDON, March 8 (Reuters) - Easing fears about the U.S.
economy and European debt buoyed world equity markets on Monday,
extending a rally that has taken many bourses into positive
territory for the year.
Wall Street looked set to open flat after a big jump on
Friday.
MSCI's all-country world stock index <.MIWD00000PUS> was up
half a percent, driven by strong performances in Japan and
emerging markets. European shares were flat to higher.
The world index was in the black year-to-date for the first
time since January, apart from a brief blip on Friday.
Friday's U.S. data -- showing employers cut fewer jobs than
expected last month and that consumers showed signs of shedding
their penny-pinching behaviour -- lifted sentiment.
Worries about Greek and other peripheral euro zone economy
debt were also calmed by a series of weekend comments by
politicians and policymakers.
French President Nicolas Sarkozy promised on Sunday that
euro zone countries would help Greece if its financial problems
worsened and vowed a crackdown on market speculators.
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The cost of insuring Greek sovereign debt fell and the yield
spread between Greek bonds and benchmark German Bunds narrowed.
"The market is a little more positive, buoyed by what
happened in the United States on Friday with the non-farm
payroll figures," said Justin Urquhart Stewart, director at
Seven Investment Management.
"There is also a view that, while Europe has not resolved
its problems, the worst of what has happened to Greece has
passed for the moment ... but that is not to say it cannot come
back."
Japan's Nikkei <> gained more than 2 percent to close
at a 6-week high. Europe's FTSEurofirst 300 <> was flat,
following six consecutive sessions of gains, but blue-chip
European shares gained <>.
SUPPORT FOR GREECE
Bond traders were digesting the statements of support for
Greek debt from Sarkozy and others, with euro zone debt
generally cheaper on the back of positive stock sentiment.
The five-year credit default swap (CDS) on Greek government
debt fell to 281.6 basis points from 296.2 bps at the New York
close on Friday, meaning it now costs 281,600 euros per year to
insure an exposure of 10 million euros of Greek debt.
The Greek/German 10-year government bond yield spread
narrowed to 284 bps from 290 bps at Friday's settlement close
and was well off a euro lifetime high of above 400 bps hit in
January.
The yen and the dollar fell as the above-forecast U.S. jobs
data was seen boosting the prospects for a global economic
recovery, lifting investor demand for risk and higher-yielding
currencies.
The euro also gained after the supportive comments on
Greece.
The euro <EUR=> was up 0.2 percent at $1.3650. The dollar
index <.DXY> was 0.1 percent lower at 80.347.
Data showed currency speculators cut by more than half their
long bets on the U.S. dollar in the week to March 2. [].
(Additional reporting by Joanne Frearson; editing by John
Stonestreet)
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope)
