GLOBAL MARKETS-Stocks rise as China fears ease; oil recovers

* U.S (Other OTC: UBGXF - news) . stocks up more than 1 pct

* Dollar rises

* Oil erases earlier losses to trade flat (Updates with new quote, European shares closing up)

By Caroline Valetkevitch

NEW YORK, Sept 2 (Reuters) - Global stock indexes rose on Wednesday, drawing support from reports of brokerage measures in China to invigorate the country's battered markets, while oil recovered from earlier losses to trade near flat.

Major U.S. stock indexes gained about 1 percent, also boosted by upbeat data on U.S. productivity.

European equities ended up 0.2 percent, building on early relief after Chinese stocks managed to bounce from steep losses before closing slightly lower.

Nine Chinese brokerages pledged to buy more than 30 billion yuan of shares, according to the China Securities Journal. That eased investor fears that Beijing may be intensifying a trading crackdown.

The news stabilized global markets and soothed concerns that slowing growth in China will hurt the global economy.

"We expect some more volatility going forward, but we see the recent selloff as a correction and not the start of a bear market," Philippe Gijsels, head of research at BNP Paribas (Xetra: 887771 - news) Fortis Global Markets, said.

"Possible actions by some central banks such as China doing more to stimulate its economy, the European Central Bank extending its bond-buying program and the Fed delaying an interest rate hike are likely to support the market."

The Dow Jones industrial average rose 207.18 points, or 1.29 percent, to 16,265.53, the S&P 500 gained 21.81 points, or 1.14 percent, to 1,935.66 and the Nasdaq Composite added 68.66 points, or 1.48 percent, to 4,704.77.

The U.S. market is still down for the year following the recent selloff.

MSCI (NYSE: MSCI - news) 's all-country stock index rose 0.4 percent but is down 7.0 percent for the year-to-date.

U.S. data showed nonfarm productivity increased at its strongest pace in 1-1/2 years in the second quarter, keeping wage inflation subdued for now.

Oil prices were last near unchanged, erasing earlier losses in a volatile session. Data from the Energy Information Association showed U.S. crude stockpiles rose unexpectedly last week.

Brent and U.S. crude prices dropped sharply on Tuesday, ending a 25 percent three-session surge, the largest such gain since 1990.

"A rise of around 25 percent in three consecutive days was not going to be sustained," BNP Paribas oil analyst Harry Tchilinguirian said. "The underlying fundamentals are bearish."

Brent crude for October was down 1 cent at $49.55 a barrel. U.S. crude for October was flat at $45.41.

The dollar rose as global stock markets steadied, and as U.S. hiring data encouraged speculation that Federal Reserve policymakers will raise interest rates later this month.

The dollar index, a measure of six major currencies valued against the greenback, was last up 0.40 percent and had added to gains when payrolls processor ADP reported that U.S. private payrolls increased by 190,000 last month.

The more comprehensive non-farm payrolls report is due on Friday, the last monthly report before the Fed meets on Sept. 16-17.

U.S. Treasuries prices slipped after the fresh efforts in China to steady financial markets mitigated concerns about the world's second-biggest economy and reduced demand for safe-haven U.S. government debt.

Benchmark 10-year Treasuries were last down 3/32 in price to yield 2.18 percent, from a yield of 2.17 percent late on Tuesday. U.S. 30-year Treasuries were last down 11/32 to yield 2.95 percent, from a yield of 2.93 percent late on Tuesday. (Additional reporting by Lionel Laurent and Atul Prakash in London; Editing by Meredith Mazzilli)