Stocks on Wall Street edged forward, led by energy and materials companies riding higher commodity prices, and a continued rally in technology shares.

The small gains came despite a bigger-than-expected drop in new-home sales for November. The report had dragged on stocks earlier in the session.

Other reports showed personal incomes and spending both rose at a slower-than-expected pace last month, but a survey of consumer sentiment rose to a three-month high.

The Dow Jones Industrial Average closed 1.51 points higher at 10,466.44. Alcoa led the measure, up 0.9%. DuPont was also a strong performer, up 0.7%. Home Depot was down 1.3%.

Bank stocks also took a hit, with Bank of America and JPMorgan both falling about 1%.

Technology stocks continued to rally. Online auction house eBay gained 4.5% and search engine Yahoo rose nearly 4%.

Consol Energy jumped 5.1%, while Massey Energy rose 3.5% and Peabody Energy was also up 2.2%. Metals futures were also higher, lifting shares of Newmont Mining 3.4%, and Freeport-McMoRan Copper & Gold 3.6%.

The S&P 500 index was up 0.2% to 1120.59 while the Nasdaq Composite Index continues to climb, putting on 0.7% to 2269.64.

European shares climbed to 14-month highs as banks and miners led the way amid rising confidence that the economy will continue to recover.

The pan-European Dow Jones Stoxx 600 Index ended the last full trading session before Christmas with a gain of 0.3% to close at 251.90, after setting a session high of 252.95.

The advance took the index above its previous 2009 closing high of 251.34 set on November 16 and back to levels not seen since October 2008.

The gains marked a third-straight up session, including a jump of 2% on Monday. The DJ Stoxx 600 is now up 27% since the start of the year and up about 60% from its March lows.

Canadian stocks rose for a third day, led by gold and energy producers, as the precious metal rallied on a weaker US dollar and oil futures gained on a drop in inventories.

Goldcorp increased 3.1% after the Dollar Index fell for the first time in seven days. Suncor Energy advanced 1.5% as crude stockpiles plunged three times the amount analysts forecast. Base-metals producer Sherritt International gained 4.6% as nickel and copper futures rallied.

The S&P/TSX Composite Index added 30.75 points, or 0.3%, to 11,658.70.

Commodities: Oil, gold up

Crude-oil prices surged on the inventories report, signalling that the long-awaited tightening of supplies.

Futures contract for February delivery traded $US1.91, or 2.6%, higher at $US76.31 a barrel in New York, with the intraday peak of $US76.53, the highest since December 4. Brent crude on the ICE futures exchange was up $US1.45 at $US74.91 a barrel.

Oil inventories plunged 4.8 million barrels in the week ended December 18, far exceeding the average one-million-barrel decline expected by analysts.

Gold futures traded slightly higher as the dollar is slightly softer against its major rivals.

February gold was up $US2 at $US1088.70 an ounce in New York after falling on Tuesday to its lowest close since November 3.

Currencies: Dollar down

The dollar lost ground against the euro and yen. Thin, pre-holiday markets gave investors room to push the greenback around more than normal, and analysts said the dollar will likely remain on an upward path against most of its major rivals despite the slide.

The euro was at $US1.4355 from $US1.4249. The dollar was at ¥91.48 from ¥91.81, while the euro was at ¥131.30 from ¥130.85.

The UK pound was at $US1.5970 from $US1.5973.

Canada’s dollar climbed to the strongest level in almost three weeks. It appreciated 0.9% to $C1.0478 per US dollar, from $C1.0574. One Canadian dollar buys 95.43USc.