* Wall St gains, world equity gauge little changed
* Bond yields jump, curve flattens after strong data
* Dollar edges up after U.S. jobs, wages data (New throughout, updates prices, market activity to close of European bond, stock markets)
By Herbert Lash
NEW YORK, Feb 6 (Reuters) - The dollar and U.S. government debt yields jumped on Friday as a strong U.S. labor market report raised expectations that the Federal Reserve will increase interest rates by midyear.
Wall Street rose and European equities hit a seven-year high on the Labor Department report that showed solid U.S. job growth while wages rebounded strongly last month.
Oil futures bounced up from near-six-year lows, while U.S. Treasury yields rose and the yield curve flattened as traders increased bets the Fed will begin raising rates by mid-year.
But Wall Street's somewhat weak response to the data raised some concerns about the U.S. equity market's strength.
"The reason the market is being held back is the realization that this puts the Fed in play (to hike rates) for probably June 2015," said Phil Orlando, chief equity strategist at Federated Investors in New York. "There was a growing feeling that the Fed had moved into 2016 based upon some of these weak data points we've seen in recent weeks."
Jack Ablin, chief investment officer at BMO Private Bank in Chicago, said he'd rather see the economy strong enough to force the Fed to tighten rather than sit on the sidelines.
"For me, it's really mostly protein versus sugar," Ablin said. "We can keep eating donuts on easy Fed policy or we can maybe start to digest something more substantial."
The Dow Jones industrial average rose 35.61 points, or 0.2 percent, to 17,920.49. The S&P 500 added 7.01 points, or 0.34 percent, to 2,069.53 and the Nasdaq Composite gained 17.69 points, or 0.37 percent, to 4,782.78.
In Europe, the FTSEurofirst 300 index of top regional shares rose 0.19 percent to a provisional close of 1,490.653 points. But markets in Britain, Germany, France and Italy all fell on mixed earnings reports and worries about a bailout of Greece, putting a damper on global equity gauges.
MSCI's all-country world stock index fell 0.06 percent.
Brent crude was on track for its biggest weekly rise since 2011, boosted by fighting in Libya and the strong economic signals from the United States.
Benchmark Brent crude traded $1.21 higher at 57.78 a barrel. U.S. crude for March delivery traded at $51.55 a barrel, up by $1.07.
On the U.S. Treasury market, benchmark 10-year note yields fell 1 2/32 in price to yield 1.9341 percent, while 30-year bond yields rose to 2.5252 percent. Yields on German bunds and British gilts also rose on the U.S. jobs data.
"By any measure, this was an extremely good report," said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York.
The dollar index was up 1.07 percent at 94.574, while against the yen, it rose 1.34 percent to 119.08.
The euro was down 1.19 percent at $1.1339. (Additional reporting by Chuck Mikolajczak in New Yori, reporting by Herbert Lash; Editing by David Gregorio)