*

US stocks end higher

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Oil surges as US, EU impose fresh sanctions on Russian

energy

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White House says Trump to meet Xi in South Korea in Asia

trip

(Updates with US closing levels)

By Caroline Valetkevitch

NEW YORK, Oct 23 (Reuters) - Oil prices surged more than

5% to a two-week high on Thursday after Washington imposed

sanctions on major Russian companies over the Ukraine war, while

major stock indexes climbed as gains in U.S. and European energy

shares helped to offset some mixed earnings news.

The sanctions, announced late Wednesday, were placed on

major Russian suppliers Rosneft and Lukoil.

European Union countries also approved a 19th package of

sanctions on Moscow that included a ban on Russian liquefied

natural gas imports, while Britain hit Rosneft and Lukoil with

sanctions last week.

Wall Street stocks ended higher, with indexes gaining

momentum after the White House confirmed U.S. President Donald

Trump will meet Chinese President Xi Jinping next week as part

of his trip through Asia.

Trade tensions between Washington and Beijing have been

escalating, marked by tit-for-tat retaliatory measures announced

by both sides. Confirmation that the two leaders would meet next

week appeared to ease those tensions.

Energy led sector gains on the S&P 500 index, and ended

1.3% higher.

A clutch of positive earnings reports also helped to support

stocks. Shares of Honeywell ( HON ) gained 6.8% after the

company lifted its 2025 profit forecast. However, International

Business Machines ( IBM ) shares eased 0.9% after the company

recorded a slowdown in growth in its key cloud software segment.

"In general, the (stock) market is responding to earnings,

which for the most part continue to be good. And the other

factor is that Trump placed severe sanctions on major Russian

oil companies, which is being applauded by the market. You can

see that in the energy sector," said Peter Cardillo, chief

market economist at Spartan Capital Securities in New York.

The Dow Jones Industrial Average rose 144.20 points, or

0.31%, to 46,734.61, the S&P 500 gained 39.04 points, or

0.58%, to 6,738.44 and the Nasdaq Composite advanced

201.40 points, or 0.89%, to 22,941.80.

MSCI's gauge of stocks across the globe rose

4.32 points, or 0.44%, to 995.09.

The STOXX 600 index closed at a record high, led by gains in

energy stocks. The pan-European STOXX 600 index

advanced 0.37% to 574.43 points. Also helping sentiment, shares

of Kering jumped after the Gucci owner said sales in

the previous quarter declined less than analysts had expected.

Oil futures registered their biggest daily percentage gains

since mid-June and their highest closes since October 8. U.S.

energy data showed Russia was the world's second-biggest crude

oil producer in 2024 after the U.S.

U.S. crude gained 5.6% to settle at $61.79 a barrel.

Brent gained 5.43% to settle at $65.99.

U.S. Treasury yields rose, with those on the long end advancing

after falling three straight sessions. Investors also braced for

a report on the U.S. Consumer Price Index on Friday.

The U.S. Bureau of Labor Statistics said last week it would

publish the CPI report despite the government shutdown - now on

its 23rd day - to assist the Social Security Administration with

its annual cost-of-living adjustment for 2026 for millions of

retirees and other benefits recipients.

In afternoon trading, the yield on the benchmark U.S. 10-year

Treasury note rose 4.4 basis points (bps) to

3.995% after hitting a session high of just above 4%.

The geopolitical risks renewed demand for safe-haven gold. Spot

gold rose 0.76% to $4,125.00 an ounce.

Helping offset some of the angst over geopolitical flashpoints

and trade tensions is the firm belief among investors that the

Federal Reserve will continue to cut U.S. interest rates. The

dollar index was last little changed. It has been edging

higher in recent months as investors have become more confident

the Fed will act to protect the economy.

The U.S. currency was last up 0.38% on the yen at 152.525 yen

, while the U.S. dollar index, which measures the

greenback against a basket of currencies, was last nearly flat

at 98.925.

(Additional reporting by Gregor Stuart Hunter in Singapore;

Editing by Richard Chang and Stephen Coates)