US stocks rallied on Tuesday, erasing the Standard & Poor's 500 loss for the year as strong notebook-computer sales from Best Buy lifted technology companies such as Microsoft while lower delinquencies from credit-card issuers including American Express also provided a boost.
The Dow Jones Industrial Average jumped 213.88 (2.10%) to 10,404.77, its highest close since May 19 and the fifth time this year the Dow had a one-day gain of more than 200 points. However, the measure is still off 0.22% for the year.
All of the Dow's 30 components ended Tuesday's session in the black. American Express was one of the measure's best performers with a gain of $1.70 (4.3%) to $41.59, after the credit-card company said in a regulatory filing the number of US borrowers at least a month behind in their card payments declined to 2.9% in May from 3.1% in April. Bank of America and JP Morgan Chase also reported lower delinquencies in May from April. Bank of America rose 39 cents (2.5%) to $15.80, and JP Morgan climbed 92 cents (2.5%) to $38.25.
Microsoft jumped $1.09 (4.3%) to $26.58, leading the gains across the Dow's other technology components. Intel rose 59 cents (2.8%) to $21.48, Cisco Systems climbed 57 cents (2.5%) to $23.33, and Hewlett-Packard advanced $1.10 (2.4%) to $47.98. The companies were boosted by a report from Best Buy, which showed improved US sales of notebook computers.
However, Best Buy, which is not a Dow component, dropped $2.49 (6.1%) to $38.56, as weakness in other categories including televisions, gaming, music and movies, along with higher-than-expected spending on new stores and other growth initiatives, kept the consumer-electronic retailer's quarterly profit and sales below analysts' estimates.
The Nasdaq Composite climbed 61.92 (2.76%) to 2,305.88, its highest close since May 18. The measure is now up 1.62% for the year.
The Standard & Poor's 500 rose 25.60 (2.35%) to 1,115.23, its highest close since May. Tuesday's climb brought the measure back into positive territory for the year, as it eked out a gain of 0.01% for 2010. All of the measure's sectors rose, led by the industrial and technology categories.
The Dow and the S&P 500 also joined the Nasdaq Composite in closing above their 200-day moving averages. Nasdaq had been above that technical level for the past three days, but for the Dow and the S&P 500, Tuesday marked the first time those measures were able to close above their 200-day moving averages since May 19.
For Australian ADRs listed on the NYSE, BHP Billiton firmed $1.97 (2.99%) to US$67.83, Rio Tinto Plc added $1.96 (4.08%) to US$49.95, ResMed advanced 97 cents (1.49%) to US$66.09, Telstra Corporation improved 2 cents (0.15%) to US$13.76, Telecom Corporation of NZ climbed 15 cents (2.27%) to US$6.77 and Westpac increased $2.17 (2.17%) to US$102.34.
In economic news, the US economy continues to expand at a gradual pace and inflation remains tame, data shows. The annual rate of imported inflation slows to 8.6% from 11.1% in April. And the Empire State's business-conditions index increased to 19.57.
At 7:45 AM (AEST), the 10-year Treasury note yield was 3.30% and the five year yield was 2.07%.
European shares ended higher on Tuesday for the fifth consecutive session as an early focus on a ratings agency downgrade for Greece gave way to optimism generated by a takeover bid for BSkyB and a key vote in the Swiss parliament on the fate of UBS.
Shaking off early losses, the Stoxx Europe 600 index rose 0.7% to close at 254.28.
Inflation data came from the UK, where annual consumer price inflation slowed more than expected to 3.4% from 3.7% in April although it remains well above the Bank of England's 2% target.
The UK FTSE 100 index rose 0.3% to end at 5,217.82, while the French CAC-40 index traded up 1% to finish at 3,661.51. The German DAX index closed 0.8% higher at 6,175.05.
Standouts in Europe included British Sky Broadcasting, which rose 16.6% to 700 pence a share. News Corporation, which is the parent of MarketWatch, said that it wants to buy the BSkyB shares it doesn't already own for 700 pence a share, or GBP7.8bn in total. News Corp., which already owns 39.1% of BSkyB, said that it originally offered 675 pence a share on June 10 but increased the offer following talks with the firm.
BSkyB, however, said its independent directors believed the offer "undervalued significantly" the company, adding that they would have been prepared to support a proposal worth more than 800 pence a share, or around GBP8.9bn.
Other media-sector gainers included UK broadcaster ITV, which rose 3.5%, while Sky Deutschland, in which News Corp. also holds a minority stake, jumped 18.2%. Virgin Media, a rival of BSkyB, slipped 3.7%.
In the banking sector, Swiss bank UBS climbed 2%. Swiss law makers reportedly voted on Tuesday to approve a deal allowing the names of thousands of UBS customers and suspected tax evaders to be handed to US authorities. UBS agreed to hand over that information early last year.
Societe Generale shares rose 3.9% after the French bank said that it's targeting a net profit of EUR6bn in 2012 and annual revenue growth of 4%.
However, Greek banks fell with Piraeus Bank dropping 1.5% after Moody's rating agency downgraded Greece's government bond ratings to Ba1 from A3, putting Greece at junk status.
On the FTSE 100, Rio Tinto rose 19.50 pence (0.59%) to 3,331.50 pence and BHP Billiton dropped 2.00 pence (0.1%) to 1,916.48 pence.
Asian stock markets overcame weak cues from Wall Street and Greece's credit-ratings downgrade, with most ending modestly higher in choppy trading, with property shares helping Hong Kong advance for a sixth straight session.
Japan's Nikkei Stock Average finished 0.1% higher, Hong Kong's Hang Seng Index ended up 0.1% after dipping into the red a few times during the session ahead of a holiday on Wednesday. Markets in China were closed for a public holiday.
New Zealand shares put in another lacklustre performance, ending flat for the second consecutive session as volume remained light. The NZX-50 Index closed almost unchanged at 3,043.90 on volume of less than NZ$50m.
Base metals on the London Metal Exchange rose on a rallying euro and gains in global equity markets. Aluminium rose $35 (1.76%) to $2,020 while copper firmed $60 (0.90%) to $6,690 and nickel added $165 (0.82%) to $20,300. Zinc strengthened $45 (2.50%) to $1,845 and lead gained $45 (2.63%) to $1,755. Comex copper was last quoted at 302.50 US cents per pound.
Gold posted a gain after some investors used a recent price retreat as a buying opportunity in the wake of lingering long-term worries about debt issues in Europe and the perceived threat of potential inflation. Spot gold was last quoted at $1,233.95. Comex gold futures climbed $9.90 (0.81%) to $1,234.40. Spot silver was last quoted at $18.50.
Crude-oil jumped to their highest prices in more than a month, supported by an optimistic outlook for global growth and strong gains by the euro and equities markets. West Texas Intermediate was last quoted at US$76.94 per barrel.
At 07:45 a.m. (AET) the US dollar was quoted at 0.8114 euros, 91.46 yen, 1.156 AUD and 67.58 pence.