* Brazil stocks post biggest gain in 7 years after Lula
detained
* Wall St touches two-month highs
* Oil prices on pace for 10 percent increase this week
* Dollar falls on wage decline in U.S. payrolls
(Adds new info, new quote, updates to afternoon)
By Dion Rabouin
NEW YORK, March 4 (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 labor-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 labor market is in good
shape, although wage growth was more disappointing."
The Dow Jones industrial average .DJI rose 104.88 points,
or 0.62 percent, to 17,048.78, the S&P 500 .SPX gained 14.04
points, or 0.7 percent, to 2,007.44 and the Nasdaq Composite
.IXIC 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 .BVSP 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 (PA:CAGR) 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 US10YT=RR 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 .MIWD00000PUS 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 .MSCIEF was up 1.75
percent.
Oil prices touched two-month highs, on track for a 10
percent gain this week. Benchmark Brent crude futures LCOc1
rose 4 percent to $38.65, and U.S. crude CLc1 rose 3.7 percent
to $34.63.
Iron ore .IO62-CNI=SI and copper CMCU3 both hit
four-month highs.
The dollar fell 0.25 percent against a basket of major
currencies .DXY and the euro rose above $1.10 for the first
time since Feb. 26 EUR= .