GLOBAL MARKETS-Stocks gain, headed for best month in four years

(Adds close of European bond, stock markets)

By Rodrigo Campos and Herbert Lash

NEW YORK, Oct (HKSE: 3366-OL.HK - news) 30 (Reuters) - Oil gained and global equity markets edged higher on Friday as investors mulled a year-end rally, with major stock indices on track to close their best month in four years, boosted in part by accommodative monetary policies in the euro zone and Japan.

Oil prices rose after the U.S (Other OTC: UBGXF - news) . oil rig count fell for a ninth straight week, indicating potentially lower crude output in coming months despite a global supply glut.

The dollar slipped after data showing U.S. consumer spending in September recorded its smallest gain in eight months as personal income barely rose, suggesting some cooling in domestic demand after recent hefty increases.

European shares closed higher, with the pan-European FTSEurofirst 300 index up 0.1 percent at 1,484.46, while the euro zone's blue-chip Euro STOXX 50 index rose 0.14 percent to 3,418.23.

MSCI (NYSE: MSCI - news) 's all-country world index of stock performance in 46 countries gained 0.29 percent.

U.S. stocks traded higher. The Dow Jones industrial average rose 42.63 points, or 0.24 percent, to 17,798.43. The S&P 500 gained 4.47 points, or 0.21 percent, to 2,093.88 and the Nasdaq Composite added 8.49 points, or 0.17 percent, to 5,082.77.

"The burning question on everybody's lips is very simply what is going to happen at the end of the year, are we going to get the Santa Claus rally?" said Andrew Wilkinson, chief market strategist at Interactive Brokers LLC in Greenwich, Connecticut.

Investors have taken in stride indications that the U.S. Federal Reserve will raise interest rates in December, and worries about slowing Chinese growth have subsided, he said.

"There are no barbarians at the gate at this moment. Everything seems to have calmed, volatility has come down, people seem to comprehend what the Fed is about to do and they got a greater sense of how deep the Chinese problems are," he said.

Energy majors Exxon and Chevron (Swiss: CVX.SW - news) reported better-than-expected results, helped by strong refining margins. Exxon rose 1.6 percent to $83.61 and Chevron was up 2.3 percent to $91.95. Chevron was the biggest boost to the Dow, and Exxon was the third-largest.

U.S. Treasuries prices rose, with benchmark yields retreating from one-month peaks as soft domestic and overseas data renewed traders' outlook on tepid global growth and month-end buying boosted longer-dated Treasuries prices.

Some investors added U.S. bonds back to their holdings on expectations of further bond-buying stimulus from the European Central Bank and the Bank of Japan to combat deflation.

The dollar index, a measure of the greenback against six major currencies, fell 0.4 percent to 96.875.

The greenback fell as low as 120.29 yen after the Bank of Japan announcement, before reversing course. The dollar last traded down 0.36 percent at 120.69 yen.

The euro broke the $1.10 mark against the dollar, rising as high as $1.1072, supported by an unexpected improvement in euro zone economic sentiment and signs of faster-than-expected inflation in Germany. It (Other OTC: ITGL - news) was last up 0.36 percent at $1.1016.

U.S. benchmark 10-year Treasury notes rose 7/32 in price to yield 2.165 percent, down 1 basis point from Thursday.

Brent, the global benchmark for oil, rose 92 cents to $49.72 a barrel.

U.S. crude futures gained 64 cents to $46.70 a barrel.

(Reporting by Rodrigo Campos, Additional reporting by Jamie McGeever in London; Editing by Alison Williams, James Dalgleish and Paul Simao; To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the MacroScope Blog click on http://blogs.reuters.com/macroscope; for Hedge Fund Blog Hub click on http://blogs.reuters.com/hedgehub)