* Wall St surges on earnings, hopes of end to govt shutdown
* Risk-on shift sends European shares near 2-month highs
* Euro/dollar rebounds after dovish ECB meeting
* Oil climbs up on Venezuela turmoil despite surging U.S. supply (Updates to late afternoon, adds commentary)
By Sinéad Carew
NEW YORK, Jan 25 (Reuters) - Wall Street indexes rallied and bond yields followed stocks higher on Friday as investors reacted to corporate earnings reports and U.S. President Donald Trump announced an agreement to end the longest ever U.S. government shutdown.
But the dollar index fell from the three-week high hit on Thursday, as traders eyed next week's Federal Reserve meeting for insight on whether policy makers will continue to take a cautious tone on the interest rate path this year.
On Friday afternoon, on the 35th day of a record shutdown that has left hundreds of thousands of federal workers missing two paychecks, Trump announced a tentative deal with lawmakers to reopen the government until Feb. 15.
"It’s a contingent agreement that only lasts for three weeks. Some sort of agreement was priced in this morning," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas, though he noted that the question remains on whether a permanent deal can be reached by the end of the three weeks.
"Earnings have also been a positive component although the number of beats is lower than the last two quarters and expectations were lowered," he added.
The Dow Jones Industrial Average rose 180.13 points, or 0.73 percent, to 24,733.37, the S&P 500 gained 21.98 points, or 0.83 percent, to 2,664.31 and the Nasdaq Composite added 85.26 points, or 1.21 percent, to 7,158.72.
The pan-European STOXX 600 index rose 0.61 percent and MSCI's gauge of stocks across the globe gained 1.02 percent after touching its highest point since early December.
However, not all investors were optimistic as some turned to gold, often seen as safe-haven bet. Spot gold added 1.4 percent to $1,298.48 an ounce, helped by the dollar decline.
In currency, the euro rebounded against the dollar after falling to its lowest level in six weeks Thursday when European Central Bank President Mario Draghi did not alter a downbeat assessment on the euro zone's economy.
The euro up 0.95 percent to $1.1412. The dollar index , which measures the dollar against six other currencies, fell 0.83 percent.
According to the latest Reuters polls of hundreds of economists from around the world, a synchronized global economic slowdown is under way and any escalation in the U.S.-China trade war would trigger a sharper downturn.
In a note to clients, UBS Global Wealth Management's chief investment officer, Mark Haefele, said that rhetoric on U.S.-China trade has become more positive and that Beijing has taken steps to stimulate its economy.
"While economic and earnings growth is slowing, we believe it is unlikely that growth will drop far below trend," he said.
Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for the next round of trade negotiations with Washington.
The British pound was up 0.8 percent after The Sun newspaper reported on Thursday that Northern Ireland's Democratic Unionist Party has privately decided to back Prime Minister Theresa May's Brexit deal next week if it includes a clear time limit to the Irish backstop.
In U.S. Treasuries, 10-year yields bounced from a one-week low as looming Treasury supply next week and caution ahead of the Fed's policy meeting and the government's payrolls report added upward pressure.
Benchmark 10-year notes last fell 11/32 in price to yield 2.7513 percent, from 2.712 percent late on Thursday.
Oil prices rose as political turmoil in Venezuela threatened to reduce supply, but fresh data on surging U.S. fuel stocks and global economic woes weighed on sentiment.
Brent crude futures settled at $61.64 a barrel, up 55 cents, or 0.90 percent. U.S. crude oil futures settled at $53.69 a barrel, up 56 cents, or 1.05 pct.
Reporting by Sinead Carew; Additional reporting by Gertrude Chavez-Dreyfuss, April Joyner, Richard Leong in New York, Ritvik Carvalho and Sujata Rao in London; Editing by Nick Zieminski and Leslie Adler