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Dow stocks hit highest since 2007

Stocks on Wall Street rallied, propelling the Dow Jones Industrial Average to its highest point since December 2007.

Investors were encouraged by a report that showed US manufacturing expanded more than expected in April.

The Dow rose as much as 125 points and at the close (8am NZ time) was up 65.69 points, or 0.5%, to 13,279.32..

The S&P 500 was up 0.6% to 1405.82, with energy leading a rise in all of its 10 industry sectors.

The Nasdaq Composite edged up 0.1% to 3050.44.

UK stocks as well-received earnings from Lloyds Banking Group boosted bank shares.

The FTSE 100 climbed 1.3% to 5812.32, while most European markets were closed for the May Day public holiday.

The Stoxx Europe 600 index rose 0.4% to 258.37, its fifth gain in the past six trading days.

Asian stock markets ended mixed, with renewed strength in the Japanese yen and some disappointing earnings reports hurting Tokyo shares.

Sydney jumped after a bigger-than-expected interest rate cut from the Reserve Bank of Australia . It cut the key cash rate by 0.5 percentage points to 3.75%, surprising markets that had priced in a quarter-point cut to interest rates.

Japan's Nikkei Stock Average closed 1.8% lower at 9350.95, andAustralia's S&P/ASX 200 index rose 0.8% to 4429.50.

Markets were closed in China, Malaysia, the Philippines, Korea, Taiwan and Thailand.

In commodities, crude-oil futures rose 1.2% to $US106.16 a barrel, while gold futures ticked down 0.1% to $US1661.70 an ounce.

In currency trading, the US dollar rose against the euro and the yen.

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