* Dow, S&P 500 end higher following energy gains
* European shares end lower; eyes on Thursday's ECB meeting
* U.S. bond yields rise on jobs momentum
(Updates with U.S. markets' closing levels)
By Caroline Valetkevitch
NEW YORK, March 7 (Reuters) - Oil prices jumped on Monday as
optimism rose that major producers might reach a price support
deal, helping U.S. stocks to notch a fifth straight session of
gains.
Brent LCOc1 hit its highest level since December, climbing
$2.12, or 5.5 percent, to settle at $40.84 a barrel, while U.S.
crude CLc1 rose $1.98, or 5.5 percent, to settle at $37.90.
Oil has rallied in recent weeks amid increasing hope that
OPEC producers may be moving toward a production freeze to
support prices in an oversupplied market. On
Monday, the Ecuadorean government said Latin American oil
producers agreed to meet on Friday in Quito to coordinate a
strategy to support crude oil prices.
"It's more confirmation that oil producers are close to
achieving some kind of a deal on price support," said Phil
Flynn, analyst at Price Futures Group in Chicago.
"It's feeding bullish sentiment into a market that's turned
180 degrees from where it stood just weeks ago."
In other commodities markets, spot iron ore prices jumped 19
percent, helped by expectations that Chinese steel mills were
planning production cuts.
A 2.4 percent gain in the S&P energy index .SPNY offset a
decline in technology shares .SPLRCT , leaving the benchmark
S&P 500 slightly positive for the session and extending the
recent rise in stocks.
The Dow Jones industrial average .DJI gained 67.18 points,
or 0.4 percent, to 17,073.95, the S&P 500 .SPX rose 1.77
points, or 0.09 percent, to 2,001.76 and the Nasdaq Composite
.IXIC dropped 8.77 points, or 0.19 percent, to 4,708.25.
U.S. stocks have posted gains in each of the last three
weeks, thanks in part to the rebound in oil prices, after a
steep sell-off at the start of the year.
MSCI's all-country world stock index .MIWD00000PUS edged
up 0.03 percent. In Europe, the pan-regional FTSEurofirst 300
index .FTEU3 closed down 0.3 percent.
The dollar fell, wiping out its initial gains, as the oil
rally rekindled demand for the euro and commodity-sensitive
currencies.
The euro's gains were limited by the view the European
Central Bank would embark on more stimulus to support the euro
zone's fragile economic recovery at its policy meeting on
Thursday.
The euro edged up 0.1 percent against the greenback to
$1.1008 EUR= and slipped 0.5 percent versus the yen to 124.75
yen EURJPY= . The dollar index .DXY , which measures the
dollar against a basket of six currencies, was down 0.2 percent
at 97.132.
In the U.S. bond market, U.S. Treasury prices fell as oil
prices surged and as traders increased bets in the wake of the
strong February jobs report that the Federal Reserve will raise
interest rates this year .
The benchmark 10-year note's yield US10YT=RR rose to 1.920
percent, its highest in just over a month. It was last down 6/32
in price to yield 1.902 percent, up from 1.883 percent late
Friday.