US stocks rallied broadly on Thursday, with Caterpillar, American Express and Chevron among the gainers, as economic data from the US and China and comments from European officials reassured investors about the global economy.
All three major large-cap measures experienced their third-largest one-day gains of the year.
The Dow Jones Industrial Average rose 273.28 points (2.76%) to 10,172.53. Caterpillar led the measure's gains with a jump of $3.14 (5.5%) to $59.95. The industrial giant generates a chunk of its revenue overseas and its shares tend to rise and fall with investors' expectations for global growth.
American Express was also strong, with a climb of $1.92 (5%) to $40.03. In addition, Chevron leapt $3.38 (4.8%) to $74.17, lifted by an increase in crude-oil futures to above $75 a barrel.
The Nasdaq Composite added 59.86 (2.77%) to 2,218.71. The Standard & Poor's 500 index rose 31.15 (2.95%) to 1,086.84. All of the S&P 500's sectors rose, with the energy, industrial and materials sectors experiencing the largest percentage gains.
The rally followed a mix of economic data and commentary that encouraged investors about the global economy. In the US, the Labor Department's weekly report showed the number of US workers filing new claims for unemployment benefits decreased slightly in the first week of June while continuing claims fell to the lowest level in 18 months, indicating the job market continues to slowly improve.
Goldman Sachs fell $3.03 (2.2%) to $133.77, with the pullback attributed in part to another volley of negative headlines. The investment bank was sued by an Australian hedge fund for $1bn, and there are reports it might be the target of a second probe by the Securities and Exchange Commission into another now-toxic CDO product.
Del Monte Foods jumped 98 cents (6.7%) to $15.65. The fruit-and-vegetable company's fiscal fourth-quarter profit fell 11%, still beating analysts' estimates, as the year-earlier quarter was a week longer and the company boosted marketing spending by 64%. The company also forecast earnings for the new year above Wall Street's average estimate, boosted its quarterly dividend and said it will launch a three-year $350m stock-buyback effort.
American Eagle Outfitters rose 47 cents (3.9%) to $12.68, after the teen retailer raised its quarterly dividend 10% to 11 cents a share, saying the increase reflects its strong cash generation and commitment to enhancing shareholder value. The company also said it has repurchased 5.9m shares for about $96m this year, leaving 24.1m shares remaining under its current authorisation.
For Australian ADRs listed on the NYSE, BHP Billiton strengthened $3.92 (6.37%) to US$65.46, Rio Tinto Plc gained $3.42 (7.64%) to US$48.18, ResMed improved 97 cents (1.55%) to US$63.66, Telstra Corporation increased 72 cents (5.55%) to US$13.70, Telecom Corporation of NZ rose 35 cents (5.78%) to US$6.41 and Westpac firmed $6.35 (6.92%) to US$98.02.
At 7:45 AM (AEST), the 10-year Treasury note yield was 3.32% and the five year yield was 2.11%.
European stocks ended higher on Thursday as the region's top two central banks stood pat on interest rates and investors focused on prospects for global economic growth.
The Stoxx Europe 600 index rose 1.6% to close at 248.46.
The advance was helped by gains for companies geared to economic growth, with carmaker Daimler rising 3.1% and miner Xstrata gaining 4.3%.
The European Central Bank has been buying European government bonds lately as part an effort to stabilise financial markets and President Jean-Claude Trichet said that the bank will continue with its liquidity measures.
The ECB and the Bank of England both left key interest rates at record lows on Thursday, as was widely expected.
Of the regional benchmarks, the UK FTSE 100 index rose 0.9% to close at 5,132.50, the German DAX index climbed 1.2% to finish at 6,056.59 and the French CAC-40 index rose 2% to settle at 3,516.64.
The oil and gas sector was unable to join in Thursday's advance, however, hit by a 6.7% drop in BP shares to 365.5 pence. The oil giant, currently battling to contain the massive oil spill in the Gulf of Mexico, said that it wasn't aware of any reason that would justify the sharp slide in its US-listed shares on Wednesday. Significant additional cash flow, below-target gearing and a strong asset base gives it significant capacity and flexibility in dealing with the cost of responding to the incident, the environmental remediation and the payment of legitimate claims, it said. The cost of the response to date is approximately US$1.43bn.
On the FTSE 100, Rio Tinto added 115.00 pence (3.65%) to 3,251.70 pence and BHP Billiton strengthened 58.00 pence (3.19%) to 1,895.56 pence.
Asian markets ended mostly higher as upbeat economic data from China, Japan and Australia as well as commodity price gains helped investors overlook losses on Wall Street and the euro zone's fiscal troubles.
Japan's Nikkei Stock Average gained 1.1%, while Hong Kong's Hang Seng Index inched up 0.1%. However, China's Shanghai Composite fell 0.8%.
New Zealand shares ended slightly higher on Thursday, overlooking a negative cue from Wall Street after the Reserve Bank of New Zealand raised its policy interest rate 25 basis points to 2.75%, its first move in more than a year. The benchmark NZX-50 ended up 0.1%, or 2.2 points, at 3,002.33.
RBNZ Governor Alan Bollard said he has opted to begin removing monetary policy stimulus given New Zealand's economic recovery.
Base metals on the London Metal Exchange ended mixed as an early afternoon rally faded when the euro eased from its highs against the US dollar.
Aluminium rose $15 (0.78%) to $1,945 while copper firmed $60 (0.95%) to $6,385 and nickel fell $145 (0.76%) to $18,940. Zinc weakened $25 (1.42%) to $1,730 and lead added $10 (0.60%) to $1,675. Comex copper was last quoted at 289.60 US cents per pound.
Gold futures continued their slide as investors felt less of a need for the metal's safe-haven properties while optimism about global growth increased.
Spot gold was last quoted at $1,217.35. Comex gold futures shed $7.70 (0.63%) to $1,222.20. Spot silver was last quoted at $18.21.
Crude-oil prices climbed to a four-week high above $75 a barrel, led by gains in equities prices. West Texas Intermediate was last quoted at US$75.48 per barrel.
At 07:45 a.m. (AET) the US dollar was quoted at 0.8258 euros, 91.39 yen, 1.179 AUD and 68.03 pence.