US stocks closed higher on Tuesday, with Microsoft, Alcoa and Bank of America among the gainers, although continued concerns about global growth sapped some of the market's earlier gains.
The Dow Jones Industrial Average rose 57.14 points (0.59%) to 9,743.62, snapping a seven-session losing streak. However, the measure lost much of its morning gains; it had been up more than 170 points earlier in the session.
Microsoft was the Dow's top performer with a jump of 55 cents (2.4%) to $23.82. Alcoa was also strong, up 21 cents (2.1%) to $10.21, and Bank of America climbed 22 cents (1.6%) to $14.06.
Limiting the gains, Home Depot dropped 42 cents (1.5%) to $27.34. Boeing was also weak, down 58 cents (0.9%) to $61.36, and American Express lost 21 cents (0.5%) to $39.21.
The Nasdaq Composite edged up 2.09 (0.10%) to 2,093.88, snapping a five-day losing streak. The Standard & Poor's 500 index climbed 5.48 (0.54%) to 1,028.06, ending a five-session losing run.
Traders characterised Tuesday's climb in stocks as a natural bounce off of last week's slump, although the gains were pared in the afternoon as investors continued to fret over the same concerns about the global economy that have weighed in recent weeks.
American depositary shares of BP rose $2.56 (8.7%) to $31.91, after the oil giant said it won't issue new equity to raise money to cover the costs of the oil spill in the Gulf of Mexico. Also boosting the shares, a broker raised its investment rating on the stock to buy from hold.
Cliffs Natural Resources slipped $2.40 (5.1%) to $44.49, after the coal and iron-ore producer agreed to acquire the West Virginia coal-mining operations of closely held INR Energy LLC for $757m. Cliffs plans to finance part of the cash purchase, expected to close within 60 days, with its $600m credit facility.
Baker Hughes climbed $1.63 (3.9%) to $43.93, after the oilfield-services company agreed to sell its Gulf of Mexico stimulation and sand-control business, which it was required to unload as a result of its purchase of BJ Services Co., for $55m. The Justice Department gave antitrust clearance to the $6.5bn buyout but required the divestiture of some assets as a condition of approval.
American depositary shares of BT Group advanced 38 cents (2%) to $19.57, after the UK Communications Workers Union said it cancelled its ballot for strike action at BT on legal advice and that it would take up the offer by the telecommunications company for talks while planning to re-ballot if necessary.
Genzyme fell $1.66 (3.1%) to $51.14, after the European Medicines Agency said the drug company's Fabry disease medicine Fabrazyme shouldn't be given to patients not already receiving it because shortages of the drug will now last until the end of the year. Fabrazyme supplies were hit by a series of manufacturing problems at a Genzyme factory, beginning in June last year.
For Australian ADRs listed on the NYSE, BHP Billiton added $1.13 (1.8%) to US$63.84, Rio Tinto Plc strengthened $1.15 (2.59%) to US$45.48, ResMed increased 78 cents (1.28%) to US$61.95, Telstra Corporation climbed 22 cents (1.66%) to US$13.46, Telecom Corporation of NZ increased 3 cents (0.47%) to US$6.39 and Westpac rose $2.34 (2.64%) to US$90.85.
In economic news, US service sector activity grew more slowly in June as business leaders fretted about the labour market's perilous state. The ISM's overall index of non-manufacturing activity eased to 53.8, falling short of the 54.9 reading economists were expecting.
The Conference Board said its June employment trends index is up 0.6% at 96.7 from May's revised 96.1, first reported as 95.7. The moderate increase in labour data suggests companies remain unsure of the recovery.
At 7:45 AM (AEST), the 10-year Treasury note yield was 2.93% and the five year yield was 1.76%.
European stocks rallied on Tuesday, with the commodity sector leading the gains, as investors picked up shares in companies recently battered by worries about economic growth.
The Stoxx Europe 600 index jumped 2.6% to 242.76. On Monday, the benchmark closed down 0.3%, its lowest level since May 25.
Investors bought shares in companies leveraged to economic growth on Tuesday, such as miners.
Xstrata shares rallied 6.4% and Vedanta Resources moved up 5.8% after the Australian central bank decided to keep rates on hold.
The French CAC-40 index rallied 2.7% to 3,423.36, the UK's FTSE 100 index climbed 2.9% to 4,965 and the German DAX index gained 2.2% to 5,940.98.
In the energy sector, Tullow Oil shares gained 4% after the company said fiscal-year working interest production was in line with expectations.
Shares of BP jumped 3.7%, reflecting hopes the oil giant's battered stock price may discount the costs of the Gulf of Mexico oil spill and attract new holders. The stock was also upgraded to buy from hold.
Banks climbed as well, in particular lenders with big exposure to the more peripheral regions in Europe. France's Credit Agricole rose 5.4% and Spain's Santander rallied 6.1%.
Spain successfully sold 10-year government bonds to raise EUR6bn. The issue attracted bids worth EUR13bn.
In Frankfurt, shares of Tui AG rallied 8.3% after the firm said it expects its 43.33% stake in Hapag-Lloyd to generate higher profit contributions than initially forecast, due to a recovery in global container shipping. Transport volumes and, in particular, freight rates have continually improved over recent months and are up considerably on a year-on-year basis. Prospects for core business tourism remain unchanged, the firm also said.
On the FTSE 100, Rio Tinto firmed 169.00 pence (5.87%) to 3,049.50 pence and BHP Billiton added 92.50 pence (5.49%) to 1,769.04 pence.
Asian markets ended higher as a strong rebound in Chinese shares from one-year lows helped push several markets higher.
Japan's Nikkei Stock Average added 0.8%, while Hong Kong's Hang Seng Index advanced 1.2%. China's Shanghai Composite fell as low as 2,356.55, a level it hasn't seen since April 2009, before reversing direction to end 1.9% higher at 2,409.42.
New Zealand shares drifted higher as the Australian equity market strengthened and Pike River Coal rose on improved sentiment toward coal-related stocks. The benchmark NZX-50 ended up 5.057 points, or 0.2%, at 2,952.40.
Base metals on the London Metal Exchange rallied on a stronger euro and rising stock markets. Aluminium rose $45 (2.32%) to $1,985 while copper firmed $90 (1.39%) to $6,570 and nickel added $175 (0.93%) to $18,925. Zinc strengthened $25 (1.38%) to $1,840 and lead gained $15 (0.85%) to $1,775. Comex copper was last quoted at 297.00 US cents per pound.
Gold futures fell to their lowest levels in six weeks as demand for the metal as an alternative investment waned amid stabilising equities and currency markets. Spot gold was last quoted at $1,192.45. Comex gold futures weakened $12.60 (1.04%) to $1,195.10. Spot silver was last quoted at $17.78.
Crude oil fell for the sixth straight session, as the market failed to sustain an early rally in light of worries about slowing economic growth. West Texas Intermediate was last quoted at US$71.98 per barrel.
At 07:45 a.m. (AET) the US dollar was quoted at 0.7916 euros, 87.50 yen, 1.172 AUD and 65.98 pence.