GLOBAL MARKETS-U.S. jobs bring some relief to battered stocks

LONDON Aug 5 (Reuters) - World stocks pared losses on Friday and Wall Street looked set for a bounce after a U.S. report showed the U.S. economy creating more jobs than expected in July.

The U.S. Labor Department said payrolls increased 117,000 and the unemployment rate dipped to 9.1 percent from 9.2 percent in June. The latter, however, was mostly the result of people leaving the labour force.

A Reuters survey ahead of the report showed expectations for a rise of 85,000 with the unemployment rate at 9.2 percent.

MSCI's all-country world stock index was down 0.9 percent after earlier losses of closer to 1.2 percent. The FTSEurofirst 300 of leading European companies even moved into positive territory have earlier sharp losses.

The dollar was down 0.2 percent against a basket of major currencies . Yields on U.S. Treasuries rose.

Stock markets have been battered over the past week by worries over the slowing U.S. and global economies and the deepening of the euro zone's debt crisis. (Written by Jeremy Gaunt; editing by Patrick Graham)