* Valeant jumps as investors hope for positive news
* Crude oil surges more than 5 pct
* Indexes up: Dow 0.42 pct, S&P 0.17 pct, Nasdaq 0.13 pct (Updates to early afternoon)
By Abhiram Nandakumar
March 7 (Reuters) - The S&P and the Dow were on track to register their first five-day streak of gains since October as a surge in oil prices lifted energy and materials stocks on Monday.
Crude prices, which have largely dictated the direction of the stock market this year, extended gains and were up more than 5 percent. Brent crude was above $40 a barrel, its highest since early December.
"Oil is stabilizing and that is helping to bolster sentiment in overall equity returns," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.
"It appears that the extreme bearish scenarios are being discounted at the moment, and there seems to be a bias to the upside," said Sandven.
The Dow stayed above 17,000 on Monday, after breaching the psychologically important level on Friday, while the S&P 500 hovered near the 2,000 mark.
At 12:35 p.m. ET (1735 GMT), the Dow Jones industrial average was up 70.84 points, or 0.42 percent, at 17,077.61 and the S&P 500 was up 3.34 points, or 0.17 percent, at 2,003.33.
The Nasdaq Composite index was up 6.21 points, or 0.13 percent, at 4,723.23. The last time the Nasdaq logged five straight days of gains was in April.
Six of the 10 major S&P sectors were higher, led by the energy sector's 1.9 percent increase. Shares of Exxon were up 1.8 percent and those of Chevron rose 2.4 percent.
The S&P materials sector was up 1.2 percent. Caterpillar was up 3.7 percent at $75.66, giving the biggest boost to the Dow.
A string of upbeat data from major economies and stabilizing commodity prices have helped improve sentiment ahead of a relatively quiet week in terms of data for Wall Street as corporate earnings season draws to a close.
Valeant Pharmaceuticals was up 9.9 percent at $65.37. The Canadian drugmaker said it would report fourth-quarter numbers next week, giving investors hopes for positive news after months of uncertainty and volatility.
Urban Outfitters was up 1.2 percent at $27.98 ahead of its results after the close.
Advancing issues outnumbered decliners on the NYSE by 1,961 to 981. On the Nasdaq, 2,000 issues rose and 755 fell.
The S&P 500 index showed 10 new 52-week highs and one new low, while the Nasdaq recorded 28 new highs and 20 new lows. (Reporting by Abhiram Nandakumar in Bengaluru; Editing by Anil D'Silva)