By Riva Gold

U.S. stocks were on track to post monthly gains Wednesday, while oil prices surged on reports that major producers were close to reaching a deal to cut production.

Oil prices have whipsawed in recent sessions on questions about whether the Organization of the Petroleum Exporting Countries would come to an agreement to curb output amid a global glut of supply.

U.S. crude oil rocketed 7% to $48.41 barrel as people familiar with the group's talks said Wednesday the cartel was near a deal to slash production by more than 1 million barrels of oil a day. The S&P 500 energy sector jumped 4.1% shortly after the opening bell, with Devon Energy, Marathon Oil and Transocean gaining more than 10% each.

The Dow Jones Industrial Average gained 92 points, or 0.5%, to 19213. The S&P 500 added 0.4%, and the Nasdaq Composite was little changed.

The Dow industrials were on pace to end with a 5.9% gain for November, which would be its best month since March. The S&P 500 was heading toward a 4% monthly gain and the Nasdaq Composite was up 3.7%.

Stocks have rallied since the Nov. 8 U.S. presidential election, as investors plowed into shares of banks, industrial companies and small-caps on expectations for reduced regulation and higher economic growth. Many investors and analysts believe the gains are likely to continue.

"There's still a runway for upside given you still have a lot of positive things going on -- you have home prices increasing, consumer net worth increasing dramatically, low unemployment and signs of wage growth," said Lowell Yura, portfolio manager at BMO Global Asset Management.

Investors dumped government bonds as rising oil prices -- which boost inflation expectations -- and upbeat economic data made long-term debt less attractive to hold.

The yield on the 10-year U.S. Treasury rose to 2.386% from 2.305% on Tuesday, according to Tradeweb.

Federal Reserve Gov. Jerome Powell said Tuesday that the case for raising rates had strengthened, with the economy "growing at a healthy pace, with solid payroll job gains, and inflation gradually moving up to 2%."

The Fed is widely expected to raise interest rates at its December meeting and in 2017.

Those expectations have also lifted the dollar, which was recently up 1.3% against the yen.

Elsewhere, European stocks were on track to gain nearly 1% this month, underperforming their developed market peers amid continuing jitters about the political climate.

Recent concerns have centered around Italy. Italy's FTSE MIB Index rose 2% Wednesday, but remained down around 21% this year on concerns about weak growth, fractious banks and Sunday's referendum on constitutional reform.

If there is a "no" vote that is followed by a period of political uncertainty and market turmoil, the Italian banking system could come under further pressure, according to Maria Paola Toschi, an Italy-based market strategist at J.P. Morgan Asset Management.

In the event of a political impasse, efforts to deal with nonperforming loans at troubled lenders could stall, while some banks' efforts to recapitalize could become more challenging if foreign investors lose confidence in Italy, she said.

Still, Italian bonds and equities have already come under significant pressure, and the European Central Bank could cushion the blow, she said, softening the impact of the referendum on markets.

Earlier, markets in Asia were mixed, as a steep drop in metals prices and mining companies offset Tuesday's higher close on Wall Street.

Japan's Nikkei Stock Average was flat but ended the month over 5% higher than it started, bolstered by a steady strengthening of the dollar against the yen.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

November 30, 2016 10:45 ET (15:45 GMT)

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