U.S. stocks rise with oil futures, investors await earnings

By Sinead Carew

NEW YORK (Reuters) - Wall Street stock indexes firmed on Monday as rising oil futures boosted the energy sector and investors placed bets ahead of the U.S. quarterly corporate earnings season.

In the afternoon U.S. Treasury yields pared an earlier drop, prompted by soft demand at a $24 billion auction of three-year notes , the first part of this week's $56 billion coupon-bearing government debt supply.

Oil prices rose more than 1 percent, supported by strong demand, uncertainty over the conflict in Syria and a shutdown at Libya's largest oilfield.

Brent crude futures , the international benchmark for oil prices, settled up 1.3 percent at $55.98 per barrel and U.S. crude futures settled up 1.6 percent at $53.08.

The S&P's energy sector <.SPNY> was its biggest driver with a 1.1 percent gain.

The Dow Jones Industrial Average rose 45.01 points, or 0.22 percent, to 20,701.11, the S&P 500 gained 6.27 points, or 0.27 percent, to 2,361.81 and the Nasdaq Composite added 13.66 points, or 0.23 percent, to 5,891.47.

Investors geared up for the U.S. earnings season, which kicks off this week with first-quarter reports from some of the biggest banks. Wall Street expects S&P 500 companies to report a 10.1 percent increase in earnings, with revenue rising 7 percent, according to Thomson Reuters data.

U.S. equities rallied after Donald Trump was elected U.S. President on Nov. 8 on hopes of pro-business policies such as tax cuts and infrastructure spending. But solid earnings may be more important, said Scott Clemons, chief investment strategist for Brown Brothers Harriman in New York.

"We're going to get evidence companies have the ability to grow their top line," said Clemons.

"There's some expectation of fiscal policy built into this market but the fact this earnings rebound started in the third quarter tells me there's something bigger going on than the change of control in Washington."

International geopolitics were also causing some investor jitters on Monday after last week's U.S. air strike in Syria.

Traders attributed a stock dip around noon EDT (1600 GMT) to unverified rumours stemming from weekend reports related to North Korea.

A U.S. official told Reuters on Saturday that a U.S. Navy strike group will be moving towards the western Pacific Ocean near the Korean peninsula as a show of force as concerns grow about North Korea's advancing weapons programme.

In the currency market the dollar index , which tracks the greenback against six major currencies, was down 0.1 percent after touching its highest point in three weeks earlier in the day. The dollar had risen 0.5 percent Friday.

The yield on three-year Treasuries was down 0.5 basis point at 1.499 percent, while benchmark 10-year yield was 1 basis point lower at 2.361 percent. The MSCI all world stock index was up 0.15 percent. European stocks <.STOXX> ended the day flat as investors focussed on risks including France's upcoming presidential election.

(Additional reporting by Richard Leong in New York and Vikram Subhedar and Abhinav Ramnarayann in London; Editing by Chizu Nomiyama and James Dalgleish)