By Rodrigo Campos
NEW YORK (Reuters) - Brent crude oil prices hit a four-month high on Tuesday after reports of an agreement among two major producers to freeze output, boosting energy stocks, even as the U.S. dollar was having its strongest session in three weeks.
Crude prices rose to bring gains over the past three sessions to more than 10 percent, after Russia's Interfax news agency quoted a diplomatic source in Doha saying Russia and Saudi Arabia reached consensus about an oil output freeze ahead of a producers' meeting on April 17.
On Wall Street, energy sector shares posted the most gains and the S&P 500 hit its highest level of the session shortly after the output freeze headlines.
The Dow Jones industrial average (DJI) rose 156.04 points, or 0.89 percent, to 17,712.45, the S&P 500 (SPX) gained 15.84 points, or 0.78 percent, to 2,057.83 and the Nasdaq Composite (IXIC) added 29.55 points, or 0.61 percent, to 4,862.95.
The FTSEurofirst index of 300 major European companies (FTEU3) rose 0.6 percent, also led by energy names. MSCI's gauge of stocks across the globe (MIWD00000PUS) added 0.5 percent, its fourth gain in the past five sessions.
Earlier, Japanese shares (N225) rose 1.1 percent after a rally in the yen against the dollar
The U.S. dollar also strengthened against the euro
Currencies of commodity-based economies like the Canadian dollar also rose. Against the greenback, the loonie hit its strongest level in nine months.
"It's a commodity kind of day," said John Doyle, director of markets at Tempus Consulting in Washington.
"Oil is now more than 50 percent stronger than it was at its low in February. That's boosting general sentiment overall and with that we're seeing a rally in commodity currencies such as the Canadian dollar, which is about 30 percent higher now from its low in January."
Brent crude (LCOc1) was up 3.6 percent to $44.36 a barrel and U.S. crude (CLc1) rose 3.3 percent to $41.70.
U.S. Treasury yields rose as higher oil and global stock market gains reduced the safe-haven appeal of U.S. government debt ahead of a $24 billion three-year note sale.
Benchmark 10-year Treasury notes (US10YT=RR) fell 12/32 in price to yield 1.7656 percent from 1.724 late on Monday.
