* Stocks surge on renewed investor confidence * Expectations grow for an ECB bond-buying program * Dollar index touches nine-year high * Brent oil falls below $ 51 a barrel (Adds oil settlement prices) By Herbert Lash LONDON, Jan 8 (Reuters) – Global equity markets surged and the dollar hit a nine-year high on Thursday, lifted by the Federal Reserve’s confidence in the U.S. economy and hopes of aggressive new stimulus in Europe.

Stocks on Wall Street rose 1.8 percent and European stocks jumped nearly 3 percent as investors set aside fears from a few days ago that tumbling oil prices point to a global slowdown.

Brent oil fell and U.S. crude traded flat, while prices for U.S. and German government debt fell on growing speculation the European Central Bank will launch a bond-buying program to combat slowing economic growth.

In the latest sign of a strong U.S. economy, the number of Americans filing new claims for unemployment benefits fell last week and job cuts declined sharply in December, indicating a tightening labor market.

In Europe, ECB President Mario Draghi said the bank’s Governing Council stands ready to take unconventional measures if needed to stem a prolonged period of low inflation.

The Fed appeared in minutes released Wednesday from its December policy-setting meeting to conclude firmly that the U.S. recovery is on track despite a global deflation threat and potential turmoil from plunging oil prices.

“The decline in the price in oil, sure it spoke volumes about potential headwinds for the global economy,” said Andrew Wilkinson, chief market strategist at Interactive Brokers LLC in Greenwich, Connecticut. “But it seems as ever investors are more optimistic about the likely response from global central banks and that turned confidence around.” MSCI’s all-country world stock index rose 1.92 percent, while the FTSEurofirst 300 index of top European shares surged 2.87 percent to close at 1,368.37. The German, French and Italian stock market indexes each rose more than 3 percent.

On Wall Street, the Dow Jones industrial average was up 307.84 points, or 1.75 percent, at 17,892.36. The Standard & Poor’s 500 Index was up 35.54 points, or 1.75 percent, at 2,061.44. The Nasdaq Composite Index was up 84.36 points, or 1.81 percent, at 4,734.83.

A slump in German industrial orders in November and a drop in euro zone consumer inflation expectations reinforced bearish views of the euro as the U.S. data also helped push the single currency to a nine-year low, for a fifth day of losses.

The euro fell to $ 1.17540, its lowest since December 2005, on the EBS trading platform, and last traded at $ 1.1786, a decline of 0.43 percent.

The euro’s weakness kept the dollar index at nine-year highs. Against the yen, the dollar climbed to 119.73 yen, up 0.4 percent.

Global benchmark Brent oil fell below $ 51 a barrel as bulls and bears searched for a floor to the prolonged rout.

Brent crude fell 19 cents to settle at $ 50.96 a barrel. U.S. crude rose 14 cents to settle at $ 48.79 a barrel.

U.S. Treasury debt prices declined as Wall Street rallied and U.S. oil prices steadied and on the expectations for an ECB bond-buying program.

Prices of benchmark 10-year Treasuries were off 19/32 to yield 2.016 percent, after dipping below the 2 percent level on Tuesday for the first time since October.

The yield on the German 10-year bund rose to 0.512 percent.

“What’s going on in Treasuries has nothing to do with what is going on in the U.S. and everything to do with what is going on in Europe and with what is going on in the energy complex,” said Eric Green, head of U.S. rates and economic research at TD Securities in New York.

(Reporting by Herbert Lash; Editing by Leslie Adler and Dan Grebler)