NEW YORK (Reuters) - A gauge of stock markets worldwide rose to a two-month high on Friday, posting its largest weekly gain since October, as oil and other commodity prices firmed and strong U.S. jobs growth bolstered confidence in the global economy.
The recovery in commodities lifted emerging markets shares, which rose 1.6 percent on the day. MSCI's emerging-market stock metric .MSCIEF posted its largest one-week gain since December 2011.
U.S. equity indexes rose to their highest levels since early January following the jobs data, which showed strong growth in payrolls and an increase in labor-force participation, though there was a surprising decline in hourly wages.
Nonfarm payrolls grew by 242,000 jobs last month, beating forecasts for 190,000 new jobs, but average hourly wages dipped by 0.1 percent after a strong 0.5 percent increase in January.
The drop in wages suggested that U.S. inflation remained muted, analysts said. Policymakers at the Federal Reserve are watching inflation closely in their assessment of when to continue raising interest rates.
"The wage number might be the silver lining, if you will, against a more hawkish Fed over the next few months because the Fed has been really focused on inflation," said Mohannad Aama, managing director of Beam Capital Management LLC in New York.
A rise in the Fed's rates generally strengthens the dollar, which makes U.S. exports more expensive and can reduce profits for companies that do business overseas.
The Dow Jones industrial average on Friday .DJI rose 62.87 points, or 0.37 percent, to 17,006.77, the S&P 500 .SPX gained 6.59 points, or 0.33 percent, to 1,999.99 and the Nasdaq Composite .IXIC added 9.60 points, or 0.2 percent, to 4,717.02.
The S&P 500 rose more than 2.5 percent for the week, its third straight week of gains.
Brazil's stock market rose to a seven-month high after police detained former President Luiz Inacio Lula da Silva for questioning in an investigation of a bribery and money laundering scheme.
The Bovespa .BVSP was up more than 4 percent following a 5 percent gain on Thursday after news of Lula's questioning brought the investigation closer to President Dilma Rousseff, who is fighting off impeachment. It was the largest two-day gain the index has posted since January 2009.
For months, Brazilian assets have rallied when it appears that prospects have increased of a change in government. Rousseff's increased state intervention in the economy has long been unpopular with business.
Yields of U.S. benchmark Treasuries rose to their highest levels in a month, led by longer-dated securities. The benchmark 10-year Treasury note US10YT=RR fell 13/32 in price to yield 1.88 percent.
MSCI's global gauge of stocks .MIWD00000PUS was up 0.7 percent. Asian shares closed with their best week in five months and European stock markets ended with a third week of gains.
Oil prices touched two-month highs, gaining 10 percent this week. Benchmark Brent crude futures LCOc1 rose 4.6 percent to $38.78, and U.S. crude CLc1 rose 4.2 percent to $36.03..
Iron ore .IO62-CNI=SI and copper CMCU3 both hit four-month highs.
The dollar fell 0.25 percent against a basket of major currencies .DXY, and the euro rose above $1.10 for the first time since Feb. 26 EUR=.
Reporting by Dion Rabouin; Addtional reporting by Anirban Nag; Editing by Bernadette Baum, Nick Zieminski and Leslie Adler