* Oil up on trade hopes, military action in Syria
* Turkish lira touches four-month low versus USD (Updates prices, changes comments, dateline; previous LONDON)
By Rodrigo Campos
NEW YORK, Oct 9 (Reuters) - Stocks gained on Wednesday on a report that China could yet agree to a partial trade deal with the United States despite recent tensions, while the prospect of a last-minute Brexit agreement between the European Union and Britain seemed as remote as ever.
Sterling was little changed against the dollar after losing nearly 1% over the past two sessions, while oil prices rose on trade optimism and after Turkey launched a military operatihere in northern Syria.
China is still open to agreeing to a partial trade deal, Bloomberg reported on Wednesday, despite the recent U.S. blacklisting of Chinese technology firms and reports on visa restrictions from both sides.
"You don't want to ignore headlines, but at the same time each headline seems to say the same thing - that both sides want to see something happen and both sides are encouraged that something may happen," said Michael Lorizio, senior fixed income trader at Manulife Investment Management in Boston.
Markets have been wobbly this month on more evidence that the U.S.-China conflict over trade is increasingly damaging the global economy. Stocks have been particularly sensitive to headlines regarding trade.
"There are expectations that some sort of an interim deal will emerge from these meetings," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"Investors certainly seem more hopeful now than they did two days ago."
On Wall Street, the Dow Jones Industrial Average rose 146.5 points, or 0.56%, to 26,310.54, the S&P 500 gained 20.08 points, or 0.69%, to 2,913.14 and the Nasdaq Composite added 65.51 points, or 0.84%, to 7,889.29.
The pan-European STOXX 600 index rose 0.40% and MSCI's gauge of stocks across the globe gained 0.39%.
Emerging market stocks lost 0.17%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.45% lower, while Japan's Nikkei lost 0.61%.
Meanwhile, talks between the European Union and Britain over an agreement to cover London's departure from the EU on Oct. 31 appeared to be going nowhere.
British lawmakers have voted to force Prime Minister Boris Johnson to seek an extension to the departure date if he cannot agree a deal, but the prospect of further prolonged political uncertainty is worrying investors.
The pound initially jumped after a British newspaper report said the EU would make a major concession in the negotiations, but the gains were quickly unwound as EU sources denied it.
Sterling was recently at $1.2217, flat on the day.
The dollar index fell 0.07%, with the euro up 0.21% to $1.0977.
The Japanese yen weakened 0.28% versus the greenback at 107.40 per dollar.
The Turkish lira touched a near four-month low versus the dollar after Ankara launched a military operation against Kurdish fighters in northeast Syria just days after U.S. troops pulled back from the area.
The Turkish currency lost 0.47% versus the dollar at 5.86.
In bond markets, U.S. Treasury and euro zone government bond yields ticked higher as investors happy to take on some more risk sold out of safer assets. A flood of supply also weighed on U.S. bond prices.
Benchmark 10-year notes last fell 8/32 in price to yield 1.5648%, from 1.539% late on Tuesday.
Ecuadorian bonds tumbled as protesters began a national strike after President Lenin Moreno refused to step down or overturn anti-austerity measures that have triggered the worst unrest in a decade.
Oil prices jumped as traders bet any easing of the U.S.-China tensions would benefit global demand.
U.S. crude rose 1.98% to $53.67 per barrel and Brent was last at $59.25, up 1.73% on the day.
"Crude oil has, just like other riskier assets, received a boost from news that China is open to accept a partial trade deal," Saxo Bank commodity strategist Ole Hansen said.
"This news comes on top of earlier reports that Turkish troops have moved into Iraq - something that could add to a growing list of geopolitical worries for the oil market."
Spot gold added 0.1% to $1,507.10 an ounce. U.S. gold futures gained 0.58% to $1,512.60 an ounce.
Reporting by Rodrigo Campos; additional reporting by Tommy Wilkes and Bozorgmehr Sharafedin in London and Laila Kearney and Kate Duguid in New York; Editing by Bernadette Baum