An unexpected profit by Alcoa and a positive view of the world's biggest economy from the Federal Reserve have helped global equities rebound.

The blue chip Dow index closed above the 11,000 level for the first time in 18 months as investors looked ahead to solid first-quarter earnings season.

As usual, Alcoa kicked off  with its report after the closing bell.

The Dow Jones Industrial Average ended 8.62 points, or 0.2%, up at 11,005.97, helped by a 2.2% gain by Alcoa. The benchmark traded above 11,000 for all of the session.

Stocks on Wall Street retreated as early earnings reports fell shy of investors' high expectations.

The selling has been broad-based, although the declines in major indexes were modest.

The Dow Jones Industrial Average closed down 36.73 points, or 0.3%, at 10,627.26, hurt by a 11% plunge in component Alcoa after its weaker-than-expected fourth-quarter report.

Alcoa posted a $US277 million loss with lower sales in its construction, aerospace, commercial-building and gas-turbine markets.

Stocks on Wall Street rose, buoyed by strong trade figures from China and expectations from the upcoming fourth-quarter earnings season.

The Dow Jones Industrial Average rose 45.80 points, or 0.4% to 10,663.99, led by a 6.3% gain in component Caterpillar. It was helped by December trade figures from China showing an 18% rise in exports and a 56% rise in imports compared with the year-ago period.

For all of 2009, China said its exports totaled $US1.2 trillion, pushing it past Germany as the world's top exporter.

Stocks on Wall Street ended the week just shy of a new 14-month high as investors welcomed upbeat readings of retail sales and consumer sentiment.

Macy’s and Best Buy climbed more than 2.6% after the Commerce Department reported that sales at US retailers increased 1.3% in November, more than double the median economist estimate in a Bloomberg survey.

Alcoa rallied 8.2% after JPMorgan Chase increased its earnings estimate. Delta Air Lines led the Amex Airline Index up 6.3%, its best gain since September, as a stronger dollar pushed oil below $70 a barrel.

Stocks on Wall Street have surged as strong profits from Alcoa launched the third quarter reporting season and corporate borrowing rose for an eighth straight weekly gain.

Alcoa rose 3.5% after it reported a $US77 million profit in the third period, ending a string of losses.

The Federal Reserve said commercial paper jumped by $US67.6 billion this week, a substantial increase.

PepsiCo shares declined 1.7% after it posted better-than-expected earnings but revenue missed analysts' expectations.