* U.S. stocks up for third straight day
* Energy leads U.S. stocks higher
* Yen, U.S. Treasuries soften
* Peso firms after Mexican central bank move
(Adds close of European markets, Mexican central bank
intervention)
By Chuck Mikolajczak
NEW YORK, Feb 17 (Reuters) - Global equity markets rallied
on Wednesday, buoyed by a jump in oil prices on optimism that
top crude producers could reach a deal to freeze production,
while the Mexican peso surged after Mexico's central bank hiked
its benchmark interest rate.
After a surprise agreement deal between non-OPEC Russia and
the group's leader Saudi Arabia to freeze output at January
levels, Iran stopped short of offering to hold back output as it
wants to recoup market share it lost during years of sanctions.
Brent LCOc1 gained 7.6 percent at $34.64 and U.S. crude
CLc1 was up 6.5 percent at $30.92 a barrel.
Energy shares .SPNY , up 3.2 percent, and materials
.SPLRCM , up 2.2 percent, led Wall Street higher, with nine of
the 10 major S&P sectors in positive territory.
"Clearly with this news of some potential coordinated
pullback in production in global markets, we are beginning to
get some visibility on the prospect of a range in crude oil,"
said Peter Kenny, equity market strategist at Kenny & Co LLC in
Denver.
"Really investors want as much visibility and as few
surprises as possible and this delivers on that, this takes the
surprise out."
The Dow Jones industrial average .DJI rose 253.35 points,
or 1.56 percent, to 16,449.76, the S&P 500 .SPX gained 31.6
points, or 1.67 percent, to 1,927.18 and the Nasdaq Composite
.IXIC added 94.25 points, or 2.12 percent, to 4,530.20.
The S&P 500 has gained more than 5 percent since closing at
its lowest level since February 2014 on Thursday, and is on
track for its best three-day run since August.
The Mexican peso MXN= firmed 3.5 percent against the
dollar after its central bank unexpectedly raised its benchmark
interest rate by 50 basis points to 3.75 percent and intervened
directly in the foreign exchange market to sell dollars as part
of an aggressive new program in a major policy shift to support
the peso.
Markets were awaiting minutes of the Federal Reserve's last
meeting to judge views of policymakers on the prospect of
further interest rate hikes.
Economic data showed U.S. housing starts unexpectedly fell
in January but producer prices rose last month, with signs of an
uptick in underlying inflation, which is closely watched for
signs the Fed will raise rates.
In Europe, banks and resource stocks helped fuel a rally,
with French bank Credit Agricole CAGR.PA and UK-listed miner
Glencore GLEN.L leading the move higher.
The pan-European FTSEurofirst 300 .FTEU3 index of leading
shares closed up 2.7 percent, bringing its gains for this week
to over 5 percent, leaving it on track for its best week in over
five years.
Financials in Europe were up 3.3 percent .SX7P and basic
resources stocks surged 8.1 percent .SXPP .
MSCI's index of world shares .MIWD00000PUS was up 1.56
percent, extending Tuesday's rise of 2.3 percent, its
second-biggest gain in four years.
The dollar was up 0.11 percent against the yen JPY= to
114.19 yen while the benchmark 10-year U.S. Treasury US10YT=RR
was down 17/32 in price at 1.8347 percent US10YT=RR .
Year-to-date asset performance http://fingfx.thomsonreuters.com/2014/05/01/1605285136.htm
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