* Surprise decline in U.S. unemployment benefits buoys equities
* Record drop in PC sales pulls U.S. tech shares lower
* MSCI world equity index up 0.5 pct to five-year highs
* Yen remains under pressure from BOJ stimulus
World equity markets rallied for a fourth day on Thursday, lifted by a surprise drop in Americans seeking unemployment benefits last week, while crude fell on a cut in global demand forecasts as U.S. oil supplies hit a two-decade high.
Equity markets were also supported by Japan's aggressive monetary easing and signs of a growing recovery in China.
The 42,000 drop in initial claims for state unemployment benefits to a seasonally adjusted 346,000 could ease fears of a marked deterioration in U.S. labor market conditions after a surprise stumble in job growth in March.
Wall Street rose despite news of a 14 percent plunge in personal computer sales in the first quarter, the sharpest drop in two decades of record-keeping, which pulled Microsoft Corp. , Intel Corp. and other technology-related shares down.
The plunge marks a new milestone in the apparent ebbing of the PC age as computing goes mobile via tablets and smartphones.
The Dow Jones industrial average was up 74.23 points, or 0.50 percent, at 14,876.47. The Standard & Poor's 500 Index was up 7.33 points, or 0.46 percent, at 1,595.06. The Nasdaq Composite Index was up 2.96 points, or 0.09 percent, at 3,300.22.
MSCI's all-country world index rose 0.7 percent, a day after posting its second-best gain of the year.
European shares rose as bumper gains for asset managers benefiting from this year's equity rally lifted financial stocks.
Fund managers and traders said even if there was a pull-back it would not be enough to stop European equity markets from gradually rising higher over the course of the year.
The FTSEurofirst 300 index of leading regional shares closed up 0.56 percent at 1,192.87.
The euro zone's blue-chip Euro STOXX 50 advanced 0.5 percent to 2,674.33.
Italian and Spanish government bond yields crept higher as investors took profits on recent gains in lower-rated debt, which has been driven by demand for yield in an easy monetary policy environment.
Since the Bank of Japan unveiled its radical stimulus program a week ago, the dollar has gained about 7 percent, yields on major government bonds have fallen and MSCI's world equity index has hit levels last seen in June 2008.
The latest gains in equities have been helped by evidence of an economic recovery in China - notably signs of growing domestic demand and easier credit - and by indications from the European Central Bank last week that it may cut rates.
"The stronger-than-expected Japanese liquidity surge has led us to reassess our views on risky assets," said Salman Ahmed, fixed income strategist at Lombard Odier Investment Managers.
The benchmark 10-year U.S. Treasury note was up 5/32 in price to yield 1.7861 percent.
Brent crude oil fell below $105 per barrel, not far above an eight-month low, after analysts cut forecasts for global oil demand growth and U.S. crude oil stocks increased to their highest level in more than two decades.
Brent futures were down $1.55 to $104.24 a barrel. U.S. crude futures fell $1.21 to 93.43 a barrel.
The dollar fell from a four-year high against the yen but still looked to strengthen above the 100 level in the near term as traders bet the Bank of Japan's aggressive monetary easing will trigger further yen weakness.
The dollar was last down 0.24 percent at 99.53 yen, having risen as high as 99.87 yen on Wednesday, the strongest level since April 2009.