GLOBAL MARKETS-Stocks gain on U.S. jobs data; dollar falls

* U.S. nonfarm payrolls up 157,000 in January * U.S., European stocks get a lift, MSCI world index higher * U.S. dollar dips against euro NEW YORK, Feb 1 (Reuters) - U.S. and European stock indexes jumped on Friday while the greenback dropped against the euro after U.S. jobs data for January and upside revisions to figures for the previous two months helped calm worries about the direction of the U.S. economy. The euro's rise to its highest level against the dollar since mid November 2011 came as the jobs figures spurred a rise in risk tolerance. The dollar had already been under pressure earlier this week after the U.S. central bank said it will maintain its bond-buying and loose monetary policies. The MSCI world equity index was up 0.7 percent, having strengthened earlier on factory activity surveys in China and the euro zone for January, which increased optimism over the global growth outlook. "All the data seems to keep pointing to a slowly, steadily improving economy," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. The Dow Jones industrial average was up 138.47 points, or 1.00 percent, at 13,999.05. The Standard & Poor's 500 Index was up 12.61 points, or 0.84 percent, at 1,510.72. The Nasdaq Composite Index was up 23.91 points, or 0.76 percent, at 3,166.05. The FTSEurofirst 300 was up 0.3 percent at 1,167.73. American employers added 157,000 new jobs to their payrolls in January, slightly less than expected, but there were 127,000 more jobs created in November and December than previously reported. The jobs growth figures soothed some of the concerns about the outlook for the U.S. economy after disappointing fourth quarter GDP figures. Earlier, shares moved higher across Europe when euro zone factories recorded their best month in nearly a year in January although remaining mired in recession, according to the Markit Purchasing Managers' Index (PMI). "Providing there are no further setbacks to the region's debt crisis, these data add to the expectation that the euro zone is on course to return to growth by mid-2013," said Chris Williamson, chief economist at data compiler Markit. EURO RALLY The euro was last up 0.9 percent at $1.3697 with its session high at $1.3711. The common currency also hit its highest point against the yen since April 2010. . A separate report showed U.S. consumer sentiment improved unexpectedly in January as Americans felt Washington's deal to avert the "fiscal cliff" at the beginning of the year boded well for the economy. In other data, the pace of growth in the U.S. manufacturing sector picked up in January to its highest level in nine months as new orders and employment strengthened, according to an industry report released on Friday. The Institute for Supply Management (ISM) said its index of national factory activity rose to 53.1 from 50.2 in December, beating economists' expectations of 50.6. It was the highest level since April 2012. A source of strength for the economy in the early years of the recovery, the manufacturing sector lost some steam in the second half of last year and contracted in November in the wake of Superstorm Sandy. German Bund futures edged higher to last trade 11 ticks up on the day at 142.01. The benchmark 10-year U.S. Treasury note was up 5/32, with the yield at 1.9672 percent. GOLD GAINS Gold was up 0.4 percent at $1,6790.56 an ounce although it pared gains in the wake of the U.S. payrolls data. Silver was up 1.2 percent at $31.82 an ounce and three-month copper on the London Metal Exchange rose to $8,272 a tonne. In the oil market the rising economic optimism coupled with tension across the Middle East, the world's biggest oil producing region, has put Brent crude on track to its biggest weekly gain since mid November, while U.S. crude is set to rise for an eighth straight week. Brent oil was up 1.1 percent to $116.77, while U.S. crude futures rose 26 cents to $97.75 a barrel.