Oil gains as Russia set to meet with producers

New York - Oil prices jumped after Russia said it was ready to meet with other producers to discuss the market, while world stock indexes rose with commodity-related shares amid a backdrop of low global interest rates.

The S&P 500 rose for a fifth straight session for the first time this year, helped by increases of more than 2% in S&P's energy, materials and industrials indexes.

The S&P health index, up just 0.3%, underperformed the broader market with biotechs falling as sector sentiment tumbled alongside shares of Canada's Valeant Pharmaceuticals and after industry complaints the Trans-Pacific Partnership agreement falls short on patent protection for drugs.

Valent's US shares slid 10.3%  to $163.46.

News that Nelson Peltz's Trian Fund Management disclosed a roughly 1% stake worth $2.5bn in GE lifted GE's stock 5.3% to $26.82, the biggest positive influence on the S&P 500.

"The market was a bit oversold," said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco.

"Energy stocks are very oversold so they're a big contributor to the rally today. Commodity names seem to be catching a bit of a bid. We're still looking for low interest rates and the Fed to be on hold for a while."

The Dow Jones industrial average rose 304.06 points to 16 776.43, the S&P 500 gained 35.69 points to 1 987.05 and the Nasdaq Composite added 73.49 points to 4 781.26.

European stocks surged, with the FTSEuroFirst 300 index in Europe ending up 3%. Data showing eurozone business activity grew at its weakest pace in four months during September reinforced expectations monetary policy backdrop will remain equity-friendly.

MSCI's all-country world index was up 1.9%.

Russia

Oil prices climbed after the news on Russia, with Brent settling at $49.25 a barrel, up $1.12 and US oil's West Texas Intermediate (WTI) crude up 72 cents to settle at $46.26.

Russia, one of the world's top three oil producers, said it was prepared to meet OPEC and non-OPEC oil producers to discuss the market if such a meeting is called.

Moscow had been unwilling in the past to cut its oil output to support prices.

The US dollar rose against a basket of major currencies on renewed investor risk appetite in the wake of a disappointing US jobs report.

A US rate hike is expected to boost the dollar by driving investment flows into the United States. While the dollar has previously weakened on expectations for later Fed rate hikes, the greater risk appetite took precedence on Monday.

The US dollar index, which measures the greenback against a basket of six major currencies, was last up 0.26% at 96.081, marking a recovery from a nearly two-week low of 95.218 hit on Friday

Before Friday's jobs data, the Fed had been widely expected to raise US interest rates by year-end. It decided not to change its policy path in September.

Asia, bonds

Japan's Nikkei ended the day up 1.6%, while Chinese markets were closed for a holiday.

Analysts said the Bank of Japan could ease policy as soon as this week, though action at its October 30 meeting may be more likely.

In the bond market, US Treasuries prices fell, with benchmark yields climbing from their lowest since April, as weak services sector data supported the view that the Fed is unlikely to raise rates soon, spurring investors to move into stocks from bonds.

The Institute for Supply Management said its gauge on US services industries fell to its lowest level since June.

US benchmark 10-year Treasury notes were down 20/32 in price to yield 2.059%, up 7 basis points from late Friday. The 10-year yield touched 1.904% on Friday, which was its lowest since late April, according to Reuters data.

Gold was little changed, as profit-taking set in after a rally. Spot gold had turned down 0.1% at $1 136.11 an ounce. Copper prices jumped.

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