Wall Street joins Ukraine-relief rally; oil at 14-month low

NEW YORK (Reuters) - U.S. stock prices jumped on Monday, joining equities rallies in Europe, as investors breathed easier over the crisis in Ukraine and knocked oil prices to lows not seen in more than a year.

U.S. bond prices dropped and the dollar rose after dipping on Friday, when the government in Kiev said its artillery had hit a Russian armored column. Russia denied its forces had crossed into Ukraine.

On Wall Street, an $8.95 billion rival offer by discount retailer Dollar General Corp <.DG.N> to buy Family Dollar also helped prices.

The Dow Jones industrial average <.DJI> rose 153 points, or 0.92 percent, to 16,815.91, the S&P 500 <.SPX> gained 15.08 points, or 0.77 percent, to 1,970.14 and the Nasdaq Composite <.IXIC> added 38.42 points, or 0.86 percent, to 4,503.35.

In Europe's equities rally, which included a 1.2 percent rise in the FTSEurofirst 300 <.FTEU3>, German blue-chips were among the top gainers despite being seen as especially vulnerable to tensions between the West and Russia.

"Friday's news spooked investors, but it turns out that there was no escalation involving Russian forces over the weekend and that rebel forces have actually been retreating, which helps the market reverse losses," said Saxo Bank trader Pierre Martin. "Investors want to believe in this rebound."

Asian shares were broadly flat. MSCI's main measure of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was up 0.1 percent.

Oil fell below $102 a barrel as investor concerns over conflict in Ukraine and Iraq eased, and as higher Libyan oil output added to already ample supplies.

Brent crude was down $1.91 at $101.62 a barrel by 1400 GMT after falling to $101.43, the lowest since June 26, 2013. U.S. crude fell $1.17 to $96.18, after a gain of $1.77 in the previous session.

U.S. Treasury debt prices fell after three days of gains last week. Risk appetite grew on upbeat U.S. housing data and the easing tensions in the Middle East and Ukraine.

U.S. 10-year note prices fell 8/32 to yield 2.375 percent, from 2.339 percent late on Friday. U.S. 30-year bond prices also slid, dropping 22/32 to yield 3.170 percent, from 3.129 percent the previous session

Yields on German 10-year debt , the euro zone benchmark, rose 2.6 basis points to a shade above 1.001 percent.

As equities rose, gold slipped below $1,300 an ounce and was last trading at $1,297.50 .

In currency markets, the dollar as tracked by the U.S. dollar index <.DXY> was up nearly 0.2 percent.

"The market was a little bit concerned that things could flare up in the Ukraine region over the weekend, and the fact that they haven't has made the market relax a little bit," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.

(Reporting by Michael Connor in New York; Additional Reporting by Chuck Mikolajczak, Sam Forgione and Gertrude Chavez-Dreyfuss in New York, and Nigel Stephenson in London; Editing by Dan Grebler)