GLOBAL MARKETS-Stocks teeter, dollar off after US jobs data

* U.S. sees 85,000 jobs lost in December

* Global stocks teeter after U.S. labor market report

* U.S. dollar slips, rate views soften

*

(Adds New York dateline, U.S. trading)

By Dominic Lau and Al Yoon

LONDON/NEW YORK, Jan 8 (Reuters) - World stocks teetered near 15-month highs and the U.S. dollar and oil prices fell on Friday after a weaker-than-expected U.S. employment report cooled views on the strength of global economic recovery.

The U.S. jobs report reminded investors that unemployment will likely offset strength in manufacturing, services and housing in the world's largest economy.

U.S. stocks were mixed at midday. The Dow Jones Industrial Average <.DJI> was down 24.79 points, or 0.23 percent, to 10,582.07 and the Standard & Poor's 500 Index <.SPX> declined 1.32 points, or 0.12 percent, to 1,140.37. The pan-European FTSEurofirst 300 index <.FTEU3> was up 0.46 percent rise at 1,065.03.

World stocks measured by the MSCI All-Country World Index <.MIWO00000PUS>, rose 0.4 percent, after earlier hitting a fresh 15-month high.

"The data shows that while the U.S. economy is improving, the road to recovery is still going to be bumpy, and this has wide implications for the global economy and presents challenges for the consumer," said Henk Potts, analyst at Barclays Wealth.

U.S. employers unexpectedly cut 85,000 jobs in December, keeping the unemployment rate at 10 percent and cooling optimism over the labor market [ID:nN0747110]. Analysts polled by Reuters had expected nonfarm payrolls to be unchanged last month and the unemployment rate to edge up to 10.1 percent.

But the Labor Department also said November payrolls were revised to show the economy added 4,000 jobs, compared with the 11,000 loss first reported.

"The layoffs are abating, which is the main concern, and what's left in industry can produce efficiently and make our economy grow," said Keith Springer, a financial advisor with Capital Financial Advisory Services in Sacramento, California.

U.S. stocks curbed losses though as shipping company United Parcel Service Inc boosted its fourth-quarter outlook and said it will cut 1,800 management and administrative jobs. [ID:nN08232945].

UPS shares rose 4.1 percent to $59.76. Rival FedEx Corp added 0.8 percent to $83.62. UPS and FedEx are economic bellwethers since they reflect business and consumer spending.

In currency markets, the U.S. dollar edged lower as the employment report reversed some expectations that the Federal Reserve would raise short term interest rates around mid year.

"People are looking at that as an opportunity to buy back the dollar," said Brian Dolan, chief currency strategist, at Forex.com in Bedminster, New Jersey.

The dollar declined against a basket of major trading-partner currencies, with the U.S. Dollar Index <.DXY> off 0.32 percent at 77.667. Against the Japanese yen, the dollar fell 0.76 percent to 92.60 yen, and the euro rose 0.36 percent to $1.4369.

Safe-haven government bonds, which had been weighed down on speculation that a recovery would be strong enough to ignite inflation, rebounded sligthly.

Yields on benchmark 10-year U.S. Treasury notes declined by 0.01 percentage point to 3.82 percent.

In energy and commodities prices, U.S. light sweet crude oil rose 4 cents, or 0.05 percent, to $82.70 per barrel,, and spot gold prices fell $1.00, or 0.09 percent, to $1130.90.

(Additional reporting by Simon Falush in London and Gertrude Chavez-Dreyfuss and Chuck Mikolajczak in New York)