* U.S. indices surge after Buffett's $37 billion deal
* Weak China data raises hopes for more stimulus
* September Fed rate hike in focus
(Adds detail on oil rally, comments from Fed officials)
By Noel Randewich
SAN FRANCISCO, Aug 10 (Reuters) - Wall Street surged Monday
following a multi-billion-dollar deal by Warren Buffett's
Berkshire Hathaway (NYSE:BRKa) that raised optimism over mergers and
acquisitions, and weak Chinese data that boosted hopes for fresh
stimulus in the world's No. 2 economy.
Crude oil prices jumped as much as 3 percent after a rally
in U.S. gasoline and diesel due to a refinery outage helped
crude futures rebound from multi-month lows earlier in the
session.
All three major U.S. stock indices jumped more than 1
percent after a $37.2 billion deal by Berkshire Hathaway to buy
Precision Castparts (NYSE:PCP) showed the M&A boom was alive and well.
Global stock markets also got a lift from hopes that Beijing
might take new measures to stimulate the Chinese economy after a
report that producer prices in July hit their lowest point since
late 2009 and exports tumbled 8.3 percent in the same month.
Expectations of possible restructuring among major shipping
firms and in other key sectors helped boost recently battered
Chinese stock indices by more than 4 percent. ID:nZZN2RIR00
"The market took their cues from China overnight and the
Berkshire deal in another factor driving investor sentiment
today," said Aaron Clark, a portfolio manager at GW&K Investment
Management, which oversees about $25 billion.
RATE RISE TIMING
The outlook in China contrasted with solid U.S. jobs data on
Friday, which bolstered expectations that U.S. interest rates
would rise as early as September.
The dollar .DXY slipped 0.44 percent against a basket of
currencies after hitting a four-month high last week.
On Monday, Atlanta Fed President Dennis Lockhart said a
decision to raise interest rates should come soon while separate
comments by Fed Vice Chairman Stanley Fischer stoked some new
uncertainty about the timing.
Ten-year U.S. Treasury yields US10YT=RR were five basis
point higher at 2.2251 percent.
"U.S. yields are modestly higher, but dollar/yen needs more
widening of the interest rate spread to take it higher," said
Jeremy Stretch, head of currency strategy at CIBC World Markets.
Wall Street bounced back after losses last week. The Dow
Jones industrial average .DJI jumped 1.26 percent to 17,592.52
and the S&P 500 .SPX surged 1.16 percent to 2,101.7. The
Nasdaq Composite .IXIC added 1.08 percent to 5,097.98.
Crude oil prices rebounded from lows earlier in the session
after a rally in U.S. gasoline and diesel due to a refinery
outage.
Brent crude LCOc1 was up 3 percent, at $50.08 a barrel and
U.S. crude CLc1 was up 2 percent to $44.79 per barrel. Both
benchmarks have dropped for six weeks amid a supply glut.
FLURRY OF DEALS
As the Fed has kept rates near zero for nearly a decade,
debt has been cheap, leading to a rise in merger and acquisition
activity.
July was the seventh strongest month for global deal
activity since 1980, according to Thomson Reuters data, showing
a hunger for acquisitions as the Fed prepares to hike rates.
Through the end of July, cross-border M&A activity totaled
$913.5 billion, up 23 percent from a year ago.
"The M&A environment is ripe for more deals and at the end
of the year, you will see a lot more deals than what we saw last
year," said Art Hogan, chief market strategist at Wunderlich
Securities in New York.
The MSCI All-Country World index .MIWD00000PUS , which
tracks shares in 45 nations, was up 1.1 percent.
Euro zone equities rose after a survey showed investor and
analyst sentiment weakened only slightly in August, suggesting a
relatively robust economic recovery. Major financial shares got
a lift from broker upgrades.
There was also some optimism over Greece, where an official
said banks could get a first capital injection soon after a
bailout deal is agreed, even before the ECB completes a stress
test.