* U.S. stocks little changed in afternoon trading
* European shares end lower; eyes on Thurs ECB meeting
* U.S. bond yields rise on jobs momentum, govt supply (Updates to early afternoon, adds gold and iron ore trading)
By Caroline Valetkevitch
NEW YORK, March 7 (Reuters) - Brent oil prices shot above $40 a barrel on Monday to their highest level this year after data showed a smaller-than-expected U.S. build in crude stockpiles, while U.S. equity indexes were little changed.
Brent LCOc1 was last up $2.08, or 5.4 percent, at $40.80, while U.S. crude CLc1 rose $1.95, or 5.4 percent, at $37.84 and hit its highest since Jan. 1. Traders said the gains came as investors were rotating more assets into raw materials amid ideas OPEC producers want a higher anchor price after a selloff that has lasted nearly two years. lifted shares of U.S. energy stocks, the best-performing sector of the benchmark S&P 500 index. The energy index .SPNY climbed 2 percent. flows from broader financial markets are powering this broader rally in oil," said Scott Shelton, energy broker with ICAP (LON:IAP) in Durham, North Carolina. "I don't think the energy fundamentals for the next few days are going to matter much as the market is making a transition."
Wall Street was little changed with some indexes advancing modestly. The Dow Jones industrial average .DJI was up 56.43 points, or 0.33 percent, to 17,063.2, the S&P 500 .SPX gained 0.01 point, or 0 percent, to 2,000 and the Nasdaq Composite .IXIC dropped 15.28 points, or 0.32 percent, to 4,701.75.
Biotechs rallied, with the Nasdaq Biotech Index .NBI up 2.3 percent.
MSCI's all-country world stock index .MIWD00000PUS edged up 0.2 percent. In Europe, the pan-regional FTSEurofirst 300 index .FTEU3 closed down 0.3 percent.
The modest advances follow gains in Chinese shares, which rose for a fifth day, as reassurances by the country's leaders that the economy would remain on a sound footing soothed investors' concerns. dollar fell, wiping out its initial gains, as the oil rally kindled bids for riskier euro and commodity-sensitive currencies. The euro's gains were limited on the view the European Central Bank would embark on more stimulus to support the euro zone's fragile economic recovery at its policy meeting on Thursday.
The euro was up 0.15 percent at $1.1017 EUR= . The U.S. dollar index .DXY was down 0.2 percent. the U.S. bond market, U.S. Treasury yields rose in volatile trading as traders increased bets the Federal Reserve will raise interest rates this year in the wake of a strong February jobs report and ahead of a ECB meeting. benchmark 10-year note's yield US10YT=RR rose to 1.918 percent, its highest in just over a month. It was last down 8/32 in price to yield 1.911 percent, up from 1.883 percent late Friday.
In other commodities markets, gold futures were lower as global shares inched up. U.S. gold for April delivery GCcv1 was down 0.6 percent at $1,262.60.
Earlier, spot iron ore prices jumped to their highest in eight months, helped by expectations that Chinese steel mills were planning production cuts.