Correction - World stocks up; U.S. Treasury yields rise despite jobs report

(Corrects fourth paragraph to reflect it is the strongest first four trading days to a year since 2003 for the Dow and 2006 for the S&P and Nasdaq)

By Stephanie Kelly

NEW YORK (Reuters) - World stocks continued their strong start to 2018, with both the S&P and Nasdaq posting their best weekly gains in more than a year, while U.S. Treasury yields rose despite a weaker-than-expected U.S. jobs report.

MSCI's gauge of stocks across the globe gained 0.66 percent, reaching a fresh record high on the day.

Throughout the first week of 2018, world shares rose and several benchmarks broke records. With the world's largest economies all growing healthily at once and central banks moving slowly to tighten policy, investors have poured money into risk assets.

U.S. stocks closed higher on Friday. With the New Year's Day holiday falling on a Monday this year, it was the strongest first four trading days to a year in more than a decade for all three major indices, according to Reuters data. For the Dow, it was the strongest start since 2003 and for the Nasdaq and S&P 500 it was the strongest since 2006. [L1N1P01MO]

Gains in Microsoft , Apple and Google-parent Alphabet helped boost the S&P, and its technology index <.SPLRCT> gained 1.18 percent.

The Dow Jones Industrial Average last rose 220.74 points, or 0.88 percent, to 25,295.87, the S&P 500 gained 19.16 points, or 0.70 percent, to 2,743.15 and the Nasdaq Composite added 58.64 points, or 0.83 percent, to 7,136.56.

"We're up over 2 percent for the first four days of 2018 so that's pretty good. Markets are still working to figure out the implications of tax cuts, and that's provided some of the lift along with already good economic forecasts," said Mike Baele, managing director at U.S. Bank Private Client Wealth Management in Portland, Oregon.

European shares scored their best week since April on Friday, with the pan-European STOXX 600 <.STOXX> closing up 0.93 percent and holding at a two-month high. Euro zone blue chips <.STOXX50E> gained 1.09 percent on the day, notching the best performance since April.

Switzerland's blue-chip SMI <.SSMI> hit an all-time high, rising 0.50 percent, and Britain's FTSE 100 <.FTSE> also sailed to a new record and closed up 0.37 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.74 percent higher, while Japan's Nikkei <.N225> rose 0.89 percent.

Emerging market stocks rose 0.71 percent.

U.S. TREASURY YIELDS UP

U.S. Treasury yields rose on Friday and the two-year yield held near a more than nine-year peak. Investors stuck to their view that the Federal Reserve would raise interest rates multiple times this year despite a weaker-than-forecast December non-farms payroll report.

Non-farm payrolls increased by 148,000 jobs last month, while economists had expected a rise of 190,000. Average hourly earnings rose 0.3 percent, compared to 0.1 percent in November.

"This still represents a solid labour market," said Bill Northey, chief investment officer at the private client group of U.S. Bank in Helena, Montana. "As investors were able to sift through the data, they concluded it is not a harbinger for weaker economic activity."

Benchmark 10-year notes last fell 7/32 in price to yield 2.4763 percent, from 2.453 percent late on Thursday.

The 30-year bond last fell 14/32 in price to yield 2.8074 percent, from 2.786 percent late on Thursday.

The dollar index last rose 0.18 percent. The index briefly dipped following the release of the jobs report, but recovered shortly afterward.

The euro was down 0.31 percent to $1.203.

The Japanese yen weakened 0.31 percent at 113.10 per dollar, while Sterling was last trading at $1.3563, up 0.09 percent on the day.

Oil prices fell with U.S. production soaring. Earlier in the week, prices climbed to highs last seen in 2015, boosted by tightening supply and political tensions in OPEC member Iran.

U.S. crude fell 0.74 percent to $61.55 per barrel and Brent was last at $67.71, down 0.53 percent on the day.

In commodities, zinc hit its highest in more than a decade as concerns over market tightness continued. Three-month zinc <.CMZN3> on the London Metal Exchange was last bid at $3,355.16.

(Additional reporting by Maytaal Angel, Kit Rees Julien Ponthus and Dmitry Zhdannikov in London, Gertrude Chavez-Dreyfuss, Caroline Valetkevitch and Richard Leong in New York, Sruthi Shankar in Bengaluru, Henning Gloystein in Singapore; Editing by Nick Zieminski and Cynthia Osterman)