(Updates with European shares' close)
* Wall Street boosted by earnings
* Euro shorts close positions, traders say
By Rodrigo Campos
NEW YORK, April 20 (Reuters) - The euro and stocks on major markets recovered on Thursday as a market-friendly presidential candidate held the lead ahead of Sunday's first-round election in France, while the yen and U.S. Treasury debt prices weakened.
Former French finance minister, Emmanuel Macron, remained atop the polls for Sunday's French vote, but the election is still a four-way battle in the first round on April 23. Should Macron rank first or second in Sunday's poll, he is seen easily winning the runoff vote on May 7 after remaining candidates are eliminated.
However, after surprises in last year's U.S. election and the UK Brexit referendum, voter indecision and low turnout could catch markets wrong-footed yet again.
France's CAC stock index jumped 1.5 percent, its strongest daily performance since March 1.
On Wall Street, stocks rose as traders continued to bet on a strong earnings reporting season. Profit expectations have risen in the last two weeks and S&P 500 company earnings now are expected to have gained 11.1 percent in the first quarter.
"They really are just focusing now on the micro, which they should be, on the earnings and what the earnings are saying," said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.
"Investors are putting the geopolitical stuff to the back of the bus at the moment and they are really focusing on what they should be."
The Dow Jones Industrial Average was up 198.03 points, or 0.97 percent, to 20,602.52, the S&P 500 had gained 20.45 points, or 0.87 percent, to 2,358.62 and the Nasdaq Composite had added 58.02 points, or 0.99 percent, to 5,921.06.
The pan-European FTSEurofirst 300 index ended up 0.2 percent and MSCI's gauge of stocks across the globe gained 0.62 percent.
Emerging market stocks rose 0.55 percent.
Currency traders said short-term players were closing out positions taken in anticipation of euro weakness before the French election, emboldened by the steady stream of polls confirming that centrist Macron would lead returns on Sunday.
"Short euro is still one of the larger positions out there. No risk on the table means take some of that off," said BMO strategist Stephen Gallo.
"(But) there is still no fundamental reason for the euro to be rising here."
The U.S. dollar index rose 0.04 percent, with the euro up 0.1 percent to $1.072.
The Japanese yen weakened 0.39 percent versus the greenback at 109.31 per dollar, while Sterling was last trading at $1.2809, up 0.25 percent on the day.
Oil prices fell further after Wednesday's steep losses, with rising U.S. production weighing against comments from leading Gulf oil producers that an extension to OPEC-led supply cuts was likely.
U.S. crude fell 0.22 percent to $50.74 per barrel and Brent was last at $53.02, up 0.17 percent on the day.
U.S. Treasury yields rose as investors waited on the results from the French election, after the 10-year yield earlier failed to break below key technical resistance at 2.19 percent.
Benchmark 10-year notes last fell 10/32 in price to yield 2.2356 percent, from 2.202 percent late on Wednesday.
Spot gold added 0.1 percent to $1,280.66 an ounce. U.S. gold futures fell 0.05 percent to $1,282.70 an ounce.
Copper rose 1.43 percent to $5,635.50 a tonne.
Additional reporting by Caroline Valetkevitch, Chuck Mikolajczak and Karen Brettell in New York, Tanya Agrawal in Bengaluru, Libby George and Patrick Graham in London; Editing by Nick Zieminski