Stocks rise on Wall Street, ending three-day losing streak

The bulls charged again as stocks on Wall Street broke a three-day losing streak.

Investors sought higher risk assets as sales of existing homes in the US climbed more than forecast and speculation grew that the Federal Reserve will keep interest rates at record low.

Also benefiting were oil and gold, which reached a new high as the US dollar weakened.

Existing home sales in October surged to the highest level since February 2007.

The major indexes made strong gains early in the session but later eased back.

The Dow Jones Industrial Average closed 132.79 points, or 1.3%, higher at 10,450.90 after rising 177 points at the peak. Only two of the Dow’s 30 components, Alcoa and Merck, went against the trend. Both fell 0.3%.

The S&P 500 jumped 1.4% to 1106.24, as did the Nasdaq composite to 2176.01.

Canadian stocks rose for the first time in three days, led by oil producers.

Suncor Energy added 1.5% as crude oil increased more than $US2 a barrel before retreating. First Quantum Minerals advanced 6.2% after agreeing to buy copper explorer Kiwara for $US260 million.

The S&P/TSX Composite Index climbed 42.57 points, or 0.4%, to 11,621.90 after earlier reaching a 13-month high of 11,737.84.

European stock markets surged as investors aggressively sought higher risk assets such as shares and gold.

The pan-European Stoxx 600 index closed up 2.0% at 248.5.

The UK FTSE 100 increased 2.0% to 5355.5, Germany's DAX gained 2.4% to 5801.5 and the French CAC-40 finished 2.2% higher at 3813.2.

Commodities: Oil, gold up

Crude oil took its cue from a weaker dollar, with the January delivery futures contract rising 98USc to settle at $US78.45 a barrel in New York.

Brent crude on the ICE futures exchange traded $2.08 higher at $US79.28 a barrel.

Gold surged to a record of $US1173.75 an ounce on the spot market as investors sought insurance against a sliding dollar and the rising risk of inflationary bubbles in other assets.

Federal Reserve Bank of St. Louis President James Bullard told Dow Jones Newswires he would prefer to keep the central bank's extraordinary asset-buying programme active beyond its current cutoff date set for early next year.

This was in sharp contrast to more hawkish remarks from the European Central Bank last week and helped fuel the view that the US will lag other economies globally.

This sent the euro almost 1% higher from Friday’s close against the dollar to the psychologically significant $US1.50 level.

Gold futures for December delivery climbed $US18 to $1164.70 in New York an ounce after touching a record high of $1174 earlier in the session.

The gains among precious metals also extended to base metals. Copper reached a 14-month high of $US7,010 a tonne in London despite rising stocks.

Currencies: Dollar down, euro up

The euro hovered near the $1.50 key level at $US1.4975 from $1.4862 on Friday. The dollar was at ¥89.01 from ¥89.03, while the euro was at ¥133.26 from ¥132.32.

The UK pound was at $¨ß1.6613 from $US1.6509.

Canada’s currency appreciated the most in two weeks against its US counterpart.

The Canadian currency advanced 1.4% to $C1.0554 per US dollar from $C1.0706 on Friday. One Canadian dollar buys 94.75USc.