* Nonfarm payrolls increased by 57,000 jobs last month

* Economists polled by Reuters had forecast 110,000

* Oil hits fresh four-month lows, as Doha talks conclude

* Gold surges as rate hike likelihood wanes

(Updates to U.S. market open)

By Stephen Culp

NEW YORK, July 2 (Reuters) - U.S. stocks followed their

European counterparts higher on Thursday, and the dollar dipped

after a softer-than-expected June employment report eased the

likelihood of a rate hike from the U.S. Federal Reserve by the

end of the year.

All three major U.S. indexes advanced and gold surged

following the hotly anticipated report.

The U.S. economy added 57,000 jobs last month, or 48.2% shy

of consensus. The number marked a 55.8% slowdown from May, which

was revised sharply downward, to 129,000 from 172,000. However,

the unemployment rate unexpectedly dipped to 4.2%, edging closer

to the full employment side of the central bank's mandate.

"This was a little bit cooler than the market expected ... but

with the unemployment rate dropping to 4.2% and yearly hourly

wages at 3.5%, this could be considered a Goldilocks report,"

said Peter Cardillo, chief market economist at Spartan Capital

Securities, in New York.

"(A rate hike) is still on the table," Cardillo added. "The

market seems to be betting for at least one rate hike, probably

in the last quarter of the year."

On Wednesday, Federal Reserve Chair Kevin Warsh reiterated

the central bank's average annual 2% inflation goal, but said

that risks associated with war-related price pressures have come

down.

On the geopolitical front, a round of indirect U.S.-Iran talks,

focused on the crucial Strait of Hormuz, concluded with no sign

that the negotiators made any headway toward lasting peace.

Meanwhile, Russia launched hundreds of drones and dozens of

missiles at Ukraine's capital Kyiv, ripping into several

residential buildings and killing at least 18 people.

The Dow Jones Industrial Average rose 477.33 points, or

0.92%, to 52,786.09, the S&P 500 rose 49.89 points, or

0.65%, to 7,531.95 and the Nasdaq Composite rose 141.19

points, or 0.53%, to 26,177.28.

European shares advanced as strength in defensive stocks offset

tech weakness, and gained momentum after the U.S. jobs data

release.

MSCI's gauge of stocks across the globe rose

6.42 points, or 0.57%, to 1,124.28.

The pan-European STOXX 600 index rose 1.6%, while

Europe's broad FTSEurofirst 300 index rose 41.08

points, or 1.60%.

Emerging market stocks fell 31.97 points, or 1.86%, to

1,689.96.

The dollar slid after the soft employment report, while the

Japanese yen surged as traders girded themselves for a potential

intervention by Japanese authorities.

The dollar index, which measures the greenback against a

basket of currencies including the yen and the euro, fell 0.73%

to 100.66, with the euro up 0.69% at $1.1455.

Against the Japanese yen, the dollar weakened 1.03% to

160.88.

In cryptocurrencies, bitcoin gained 2.92% to $61,831.86.

Ethereum rose 5.84% to $1,710.85.

The yield on benchmark U.S. 10-year notes rose 0.42

basis points to 4.479%, from 4.475% late on Wednesday.

The 30-year bond yield rose 1.14 basis points to

4.9774% from 4.966% late on Wednesday.

The 2-year note yield, which typically moves in step

with interest rate expectations for the Federal Reserve, fell

2.69 basis points to 4.137%, from 4.164% late on Wednesday.

Oil prices dipped to a four-month low as supply concerns eased

following the conclusion of the U.S.-Iran talks in Doha.

U.S. crude fell 1.28% to $67.70 a barrel and Brent

fell to $70.81 per barrel, down 1.08% on the day.

Gold jumped after the weak payrolls report reduced the

probability of Fed tightening this year. Spot gold rose

2.45% to $4,128.69 an ounce. U.S. gold futures rose 1.74%

to $4,139.20 an ounce.