NEW YORK Global equity indexes and oil prices climbed for a second day on Friday, as frigid weather across the United States and Europe boosted energy demand.
Oil, which had tumbled during a recent rout in world markets, soared nearly 8 percent earlier Friday to trade above $30 a barrel, thanks to higher short-term demand and as traders cashed in their short positions.
Energy shares led the advance in U.S. stocks, which surged more than 1 percent in morning trading. Exxon Mobil (XOM.N) shares were up 2.1 percent.
Comments by European Central Bank President Mario Draghi on Thursday, suggesting the bank could ease its monetary policy at its March meeting, helped encourage investors bruised by a brutal selloff that began at the start of 2016.
"I don't think anybody really expected to see this kind of rout in global equities at the start of the year," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"At some point, you do shake all the bad blood out and that's what I think the last couple of days were about."
Brent LCOc1 was up 7 percent at $31.30 a barrel, set for its biggest one-day rise since August 2015 and well above this week's low of $27.10, while U.S. crude CLc1 rose 6.7 percent to $31.54.
The MSCI All Country World Index .MIWD00000PUS jumped 2.5 percent, while Europe's pan-regional FTSEurofirst 300 index .FTEU3 shot up 3.1 percent.
On Wall Street, the Dow Jones industrial average .DJI was up 159.16 points, or 1 percent, at 16,041.84, the S&P 500 .SPX gained 28.07 points, or 1.5 percent, to 1,897.06 and the Nasdaq Composite .IXIC added 85.88 points, or 1.92 percent, to 4,557.94.
Investors seized on Draghi's comments and bet that the Bank of Japan might also ease policy further next week, while the Federal Reserve goes slow in raising U.S. rates this year.
The dollar rose, boosted by increased expectations of monetary easing by central banks in Europe and Japan, and following strong U.S. housing data.
The dollar touched a two-week high against the Japanese yen JPY=, rising 0.7 percent to 118.50 yen. The yen has risen nearly 3 percent against the greenback this year as the sell-off in oil and global equity markets encouraged traders to seek out the safe-haven currency.
U.S. Treasuries prices fell as a resurgence in oil and stock prices sparked a fresh wave of selling of safe-haven government debt. Benchmark yields rose further from Wednesday's 3-1/2-month lows.
Benchmark 10-year Treasury notes US10YT=RR were down 18/32 in price to yield 2.082 percent, up 6 basis points from late on Thursday. The 10-year yield climbed from 1.939 percent on Wednesday, the lowest since early October.
(Additional reporting by Jamie McGeever and Nigel Stephenson in London; Editing by Bernadette Baum)
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Updated Date: Jan 23, 2016 01:00 AM