Wall St stocks rose broadly on Wednesday after a successful bond auction in Portugal eased worries about Europe's debt crisis. Financial shares jumped on hopes that banks would start raising their dividends this year.
Portugal borrowed $US1.6 billion ($A1.62 billion) at a lower long-term interest rate than many expected. That helped reassure investors concerned that Portugal may become the third European country to require a bailout after Greece and Ireland.
Analysts cautioned that it's still possible Portugal could need a financial lifeline if its economy slips back into recession this year.
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Financial stocks led the market higher after an analyst at Wells Fargo Securities issued a report saying bank earnings should grow much faster than other companies this year. He also said banks were likely to distribute more of their earnings to shareholders as dividends.
JPMorgan Chase & Co rose 2.6 per cent to $44.71 after the company's CEO, Jamie Dimon, told CNBC late Tuesday that the bank hopes to raise its dividend in the second quarter. JPMorgan's stock led the 30 large companies that make up the Dow Jones industrial average.
Other banks also rose. Bank of America gained 1.8 per cent to $14.96. US Bancorp rose three per cent to $26.82.
In early afternoon trade, the Dow was up 92.03 points, or 0.79 per cent, at 11,763.91.
The Standard & Poor's 500 index had gained 10.81, or 0.85 per cent, at 1,285.29.
The Nasdaq composite was 17.41 points higher, by 0.64 per cent, at 2,734.24.
Bond prices fell, pushing their yields higher. The yield on the 10-year Treasury note rose to 3.41 per cent from 3.34 per cent late Tuesday. The yield is used to set interest rates on many kinds of loans including mortgages.
The Federal Reserve will release a report at 2 pm (1900 GMT) on how the US economy is doing across 12 different regions in the country. Analysts expect the survey to show more signs of recovery.
LONDON - European stock markets closed higher on Wednesday as eurozone debt worries were eased by a successful Portuguese bond auction and record economic growth figures for Germany, dealers said.
They said that after weeks of doubt over whether Lisbon could raise fresh cash from the money markets, its bond sale proved that it could, if at a price which might not be sustainable over the long-term.
That was enough, however, to ease immediate concerns that Portugal would need an EU-IMF bailout, after Greece and Ireland last year, with investors happy to go along with the relief rally.
Record German 2010 growth - 3.6 per cent after a contraction of 4.7 per cent in 2009 - supported hopes that Europe's largest economy will provide enough momentum to keep the EU afloat while it puts its financial house in order.
Gains in some weaker eurozone countries were substantial - Lisbon put on 2.59 per cent, and Madrid, seen as most at risk if Portugal needs to be bailed out, soared 5.42 per cent, while Milan jumped 3.82 per cent.
In London, the FTSE 100 index of leading shares closed up 0.61 per cent at 6,050.72 points. In Paris, the CAC 40 jumped 2.15 per cent to 3,945.07 points and in Frankfurt the DAX rose 1.83 per cent to 7,068.78 points.
HONG KONG - Asian stock markets edged higher on Wednesday, taking a cautious attitude to Europe's debt crisis but buoyed by gains on Wall Street and strength among Chinese shares.
Japan's Nikkei index closed up just 0.02 per cent, or 2.12 points, at 10,512.80.
Hong Kong ended up 1.54 per cent, or 365.27 points, at 24,125.61, the Hang Seng's highest close in two months and marking a rally of 4.7 per cent so far this year.
Shanghai's Composite Index gained 0.62 per cent, or 17.26 points, to reach 2,821.31.
Stocks were boosted by gains on Wall Street and Japan's announcement that it will buy bonds from a eurozone rescue fund to help finance Ireland's bailout and support the debt-hit bloc.
But sentiment remained cautious ahead of Portugal's 2011 debut on the long-term bond market on Wednesday, amid speculation that aggressive intervention by the European Central Bank may help it avoid a bailout.
The yen's recent weakness against the euro gave Japanese exporter stocks an early boost but this was offset as the yen again pushed higher.
In Hong Kong, a 3.7 per cent jump for previously lacklustre HSBC gave the index a major boost, echoing gains by banks in Europe.
Shanghai saw gains among property, developer and resource stocks, although the market remains cautious ahead of major economic data next week.
Taipei's stock market rose 0.38 per cent, or 33.64 points, to 8,965.00, as Ruentex Industries gained 4.81 per cent on advance reports, confirmed after the close, that troubled US insurer AIG will sell its Taiwanese unit to a Ruentex-led consortium for $2.16 billion.
Bangladesh's volatile exchange rose 2.38 per cent, or 178.59 points, to 7,690.68. The market had gained 15.58 per cent on Tuesday after two days of record plunges that sparked violent protests across the country.
Mumbai jumped 1.74 per cent, on choppy trading after data showing India's industrial output fell to a 20-month-low of 2.7 per cent growth in November.
India's stock markets have been jittery amid fears of an interest rate rise by the central bank to curb soaring food inflation.
In other markets, Singapore rose 0.11 per cent, Seoul rose 0.32 per cent, Kuala Lumpur rose 0.23 per cent, Jakarta rose 2.88 per cent, Bangkok rose 0.60 per cent, and Manila rose 0.12 per cent.
WELLINGTON - The New Zealand sharemarket rose modestly with brokers noting strength in selected stocks like Vector.
Tower fell 7c to 200 on a day it traded ex a 6c dividend. Trading in Abano Healthcare was halted for a previously announced one-in-four share cancellation to be carried out. The cancellation effects a $NZ27.3 million ($A21.08 million) capital return to shareholders.
The benchmark NZX-50 index closed up 4.822 points, or 0.145 per cent, at 3,334.585, having gained 5.7 points on Tuesday.
Turnover was 32 million shares worth $NZ87.4 million ($A67.49 million). There were 32 rises and 34 falls.
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