(Updates to close)
* Wall Street pares gains after late biotech selloff
* Brent crude up on week on U.S. data, supply concerns
* Dollar edges higher vs yen; euro up before ECB meeting
* Intermediate-dated U.S. Treasuries near 2-month high
NEW YORK, March 28 (Reuters) - Global equity markets ended higher on Friday but U.S. stocks sharply pared gains after a late selloff in biotechnology shares, while euro zone government bond yields fell on renewed bets the European Central Bank will ease policy next week.
The price of Brent crude oil closed above $108 a barrel for its first weekly rise in five, helped by data showing a rise in U.S. consumer spending in February.
Gold fell to six-week lows of just above $1,285 an ounce, marking the second weekly decline as optimism on the U.S. economy lifted the dollar and bolstered risk appetite.
On Wall Street, the Nasdaq biotechnology index slumped nearly 3 percent drop. The biotech sector is down 7 percent for the week and down about 13 percent for the month.
Some analysts believe the selloff in "momentum" stocks has yet to run its course.
"Almost everyday this week, we've been seeing a pattern of the market opening higher and then selling off towards the close," said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research in Austin, Texas.
"Some are saying that it's the smart money is selling off at the end of the day. If we see that pattern again today, that would be concerning."
Among the biggest losers of the day were Gilead Science , which fell 4 percent to $68.55, and Biogen Idec , which slumped 5 percent to $294.12.
"The decline in biotech is part of the reallocation of capital as we near the end of the quarter. It seems like they are a bit out of favor right now, along with momentum stocks," said JJ Kinahan, chief strategist of TD Ameritrade in Chicago.
Stocks had rallied earlier on U.S. data that was largely promising and signs that China will step in to support its cooling economy.
At the close, the Dow Jones industrial average was up 58.83 points, or 0.36 percent, at 16,323.06. The Standard & Poor's 500 Index rose 8.56 points, or 0.46 percent, to 1,857.60. The Nasdaq Composite Index finished up 4.53 points, or 0.11 percent, at 4,155.76.
Only the Dow ended the week slightly higher. For the week, the S&P slipped 0.5 percent and the technology-laced Nasdaq tumbled 3 percent, after heavy selling in the past few sessions of Internet stocks deemed overvalued.
U.S. consumer spending rose 0.3 percent in February, the Commerce Department said, after gaining 0.2 percent in January. The gain matched economists' expectations.
The Thomson Reuters/University of Michigan's consumer sentiment index dipped to 80.0 this month from 81.6 in February, a decline that did not faze investors. The index was little changed from earlier in March.
In China, Premier Li Keqiang's said the country, the world's No. 2 economy, had necessary policies in place and would push ahead with infrastructure investment to shore up growth.
"This could avert a slowdown in China, and any stimulus that helps growth somewhere should help growth globally," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
MSCI's all-country world index rose 0.7 percent, and the FTSE Eurofirst 300 index of regional European shares was up 0.7 percent at 1331.67 points for a fourth straight day of gains.
In U.S. Treasuries, yields on intermediate-dated notes neared two-month highs. Analysts and traders expected such debt to continue underperforming longer-term bonds after Federal Reserve Chair Janet Yellen's indication last week that U.S. interest rates could be hiked by spring 2015.
The benchmark 10-year U.S. Treasury note was down 13/32, its yield at 2.719 percent.
Spanish, Italian, Portuguese and Irish bond yields fell to historical lows as an unexpected drop in Spanish inflation bolstered expectations the European Central Bank could ease monetary policy further.
Data showed that Spanish consumer prices fell 0.2 percent year-on-year in March, compared with a previous reading of 0.0 percent and a Reuters poll forecast of a 0.1 percent rise.
Italy's cost of borrowing over 10 years fell to its lowest level since October 2005 at a Friday auction.
That led to expectations that inflation for the whole euro zone could fall below the 0.6 percent Reuters consensus; the data is due on Monday. The ECB's target is just below 2.0 percent.
The euro fell to a three-week low against the dollar, with investors mindful of strong rhetoric from ECB officials about the currency's recent strength, but the euro later recovered on uncertainty over whether the bank will take action.
The euro has sagged since suggestions of more ECB action this week from Germany - whose policymakers have in the past repeatedly voiced concerns about unorthodox monetary easing.
The single currency was slightly higher at $1.3754, having dipped to $1.3707 earlier.
The U.S. dollar rose 0.7 percent against the yen, to 102.82 yen, buoyed in part by expectations that the Federal Reserve may start to tighten policy in the early part of next year.
Brent oil settled flat on the day and up 1 percent on the week, at $108.07 a barrel. U.S. crude finished at $101.67 a barrel, up 0.4 percent for the session and 2.2 percent higher on the week.
The spot price of gold was up 0.1 percent on the day at $1,292.96 an ounce. For the week, though, it was down 3 percent.
(Reporting by Herbert Lash and Barani Krishnan; Additional reporting by Jamie McGeever in London; Editing by Chris Reese and Leslie Adler)