While you were sleeping: UPDATED Wall St rises in year's first three-day rally

Equities on both sides of the Atlantic rallied with the price of oil on hopes efforts to ease the global glut are progressing.

West Texas Intermediate crude rallied 5.6% to $US30.66 a barrel, while Brent climbed more than 7%, a day after Saudi Arabia and Russia made significant headway towards an agreement on checking rising output.

Iran says it supports the plan but stopped short of saying whether it would curtail its own output.

"This is the first step and other steps should also be taken," Iranian oil minister Bijan Zanganeh said, according to the Shana news agency.

"This cooperation between OPEC and non-OPEC members to stabilise the market is good news. We support any effort to stabilise the market and prices."

Iran was the second-biggest producer in OPEC before stricter sanctions imposed in 2012 further curbed its ability to sell. Some doubt the country will be willing to restrain its production just as it has been able to ramp up again.

"If Iran's not part of the deal, it isn't worth much," Frankfurt-based Commerzbank head of commodity markets strategy Eugen Weinberg told Bloomberg. "After fighting to end sanctions for years and finally being free of them, why would Iran choose to put sanctions on itself by freezing production?"

In other energy news, shares of Kinder Morgan jumped 10.1 %, after Berkshire Hathaway disclosed a stake in the pipeline operator.

The Dow advances 257 points
On Wall Street, the Dow Jones Industrial Average gained 257 points, or 1.6%, to 16,453.83. The S&P 500 gained 1.7% to 1926.82 and the Nasdaq Composite rallied 2.2% to 4534.06.

The Dow and S&P 500 hadn’t notched a three-session winning streak since the three days ended December 23..

Advances in shares of Caterpillar and those of Boeing, up 3.6 % and 3.2 % respectively, helped bolster the Dow.

The latest US data offered better than expected news on manufacturing. A report showed industrial production rose 0.9% in January, after a 0.7% drop in December. For some, it was a reminder the US Federal Reserve might raise interest rates at its March meeting.

"This bounce is not terribly surprising because the economy is still growing and it fits with our call that eliminating the risk of a March rate hike was a mistake," Steven Ricchiuto, chief economist at Mizuho Securities in New York, told Reuters.

A separate report showed wholesale prices unexpectedly rose last month, increasing 0.1% after a 0.2% decline in December.

Finally, the latest housing data disappointed. US housing starts posted a surprise drop last month, sliding 3.8% to a seasonally adjusted annual pace of 1.099 million units.

Shares of Fossil and those of Priceline jumped after each company posted earnings that surpassed expectations, pushing their shares up 26.2% and 11% respectively.

In Europe, the Stoxx 600 Index ended the session with a 2.6% increase from the previous close. Germany's DAX Index rose 2.7%, the UK's FTSE 100 Index rallied 2.9%, while France's CAC 40 Index jumped 3%.

(BusinessDesk)