(Adds latest market numbers)
* All three major U.S. stock indexes close higher
* 10-year Treasury at four-month highs
* European stocks post fourth day of losses
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Stephen Culp
NEW YORK, Oct 22 (Reuters) - U.S. stocks gained ground on Thursday after oscillating for much of the session as growing optimism about an imminent U.S. coronavirus relief deal helped offset concern about a global surge in COVID-19 cases.
All three major U.S. stock indexes closed higher and long-dated Treasury yields rose on news of two opposing sides in Washington nearing agreement on a new fiscal aid package.
"There's a lot of volatility in the market," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "If Mnuchin and Pelosi come out this evening and say 'we're not talking any more' and the market will sell off."
Amid talks with Treasury Secretary Steven Mnuchin, House of Representatives Speaker Nancy Pelosi, a Democrat, said negotiations were progressing and that legislation could be hammered out "pretty soon." a White House spokesman added a further note of optimism, saying "this is really the most optimistic we've felt about getting a deal," President Donald Trump's economic adviser Larry Kudlow said "significant policy differences" remain.
"There are some positive signs that maybe we'll get stimulus reasonably soon," Tuz added. "I think we'll see some kind of deal between now and sometime next week."
The United States was on the brink of a widespread coronavirus outbreak, with nearly two-thirds of states in a danger zone and six, including election battleground Wisconsin, reported a record one-day increase in COVID-19 deaths on Wednesday. economic data surprised to the upside, as jobless claims fell more than expected and existing home sales blew past estimates to more than a 14-year high. Dow Jones Industrial Average .DJI rose 152.84 points, or 0.54%, to 28,363.66, the S&P 500 .SPX gained 17.93 points, or 0.52%, to 3,453.49 and the Nasdaq Composite .IXIC added 21.31 points, or 0.19%, to 11,506.01.
European stocks seesawed through much of the day but closed in the red for the fourth straight day. they settled well off session lows, trimming losses after Britain's Finance Minister announced billions of pounds in pandemic relief for hard-hit businesses. cases on the continent surged to a record high, with Spain becoming the first Western European country to exceed a million infections and France, Britain and Italy all experiencing recent record increases.
The pan-European STOXX 600 index .STOXX lost 0.14% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.07%.
Emerging market stocks lost 0.21%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.31% lower, while Japan's Nikkei .N225 lost 0.70%.
Long-dated Treasury yields hit four-month highs and the yield curve steepened on news of progressing pandemic relief talks. Benchmark 10-year yields hit their highest since early June. 10-year notes US10YT=RR last fell 14/32 in price to yield 0.863%, from 0.816% late on Wednesday.
The 30-year bond US30YT=RR last fell 35/32 in price to yield 1.677%, versus 1.629% late on Wednesday.
Crude prices recovered some of the ground lost in the previous session when higher U.S. gasoline inventories signaled deteriorating demand. crude CLcv1 rose 1.52% to settle at $40.64 per barrel, while Brent LCOcv1 gained 1.75% to settle at $42.46 per barrel.
Ongoing uncertainties surrounding the timing and size of a U.S. pandemic aid package helped the dollar edge up from a seven-week low against a basket of world currencies. dollar index .DXY rose 0.36%, with the euro EUR= down 0.37% to $1.1817.
The Japanese yen weakened 0.30% versus the greenback at 104.92 per dollar, while sterling GBP= was last trading at $1.3074, down 0.53% on the day.
Gold dipped as better-than-expected U.S. economic data and a strengthening dollar dampened the safe-haven metal's appeal. gold XAU= dropped 1.0% to $1,904.73 an ounce.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets
http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar
http://tmsnrt.rs/2egbfVh Emerging markets
http://tmsnrt.rs/2ihRugV MSCI All Country Wolrd Index Market Cap
http://tmsnrt.rs/2EmTD6j Emerging market currencies being split by U.S. election
https://tmsnrt.rs/3iY7a4i Coronavirus vs financial markets
https://tmsnrt.rs/300KB8r
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