U.S. jobs report, oil's surge push stocks higher

By Dion Rabouin

NEW YORK (Reuters) - A gauge of stock markets worldwide rose to new two-month highs on Friday, on pace for a fourth day of gains, as oil and other commodity prices firmed and strong U.S. jobs growth bolstered confidence in the global economy.

U.S. equity indexes touched their highest since Jan. 6 after February's jobs data, which showed strong growth in payrolls and an increase in labour-force participation, but a surprising decline in monthly wage growth.

Nonfarm payrolls grew by 242,000 jobs last month, beating forecasts for 190,000 new jobs, but wages dipped by 0.1 percent after a strong January 0.5 percent increase.

U.S. benchmark Treasuries saw yields rise to their highest in a month, led by longer-dated securities.

The numbers looked strong enough to "scotch suggestions that the U.S. is about to tip into recession," said Luke Bartholomew, investment manager at Aberdeen Asset Management.

"It's yet more evidence that the labour market is in good shape, although wage growth was more disappointing."

The Dow Jones industrial average rose 104.88 points, or 0.62 percent, to 17,048.78, the S&P 500 gained 14.04 points, or 0.7 percent, to 2,007.44 and the Nasdaq Composite added 34.57 points, or 0.73 percent, to 4,741.99.

Brazil's stock market rose to a seven-month high after police detained former president Luiz Inacio Lula da Silva for questioning in an investigation of a bribery and money laundering scheme.

The Bovespa was up more than 4 percent following a 5-percent gain on Thursday after news that President Dilma Rousseff could be indicated in the probe. It was the largest two-day gain the index has posted since January 2009.

"Today Lula was arrested. Maybe this is helping Brazilian assets because of the idea that it will speed up the impeachment process (of Rousseff)," said Guillaume Tresca, an emerging markets senior strategist of Credit Agricole in Paris.

"That is a very long process, but it could trigger political change and that is the only hope right now."

The benchmark 10-year Treasury note fell 20/32 in price to yield 1.90 percent.

The U.S. dollar fell, as the decrease in wage growth added uncertainty about whether the Federal Reserve will raise interest rates this year. Short-term rate indicators are pricing in one rate increase by year-end.

MSCI's global gauge of stocks was up 1 percent to a new eight-week high. Asian shares closed with their best week in five months and European stock markets ended with a third week of gains.

Emerging markets rose more than 1 percent for the second straight day, boosted by a recovery in commodities prices. MSCI's emerging market stock metric was up 1.75 percent.

Oil prices touched two-month highs, on track for a 10 percent gain this week. Benchmark Brent crude futures rose 4 percent to $38.65, and U.S. crude rose 3.7 percent to $34.63..

Iron ore and copper both hit four-month highs.

The dollar fell 0.25 percent against a basket of major currencies and the euro rose above $1.10 for the first time since Feb. 26.

(Reporting by Dion Rabouin; addtional reporting by Anirban Nag; Editing by Bernadette Baum and Nick Zieminski)