Stocks on Wall Street posted fresh 2009 highs for a second day despite a disappointing fourth-quarter earnings view from Home Depot and weaker-than-expected US industrial production numbers.

After languishing in the red for most of the session, stocks rebounded on an unexpected drop in US core wholesale prices, which gives the Federal Reserve more ammunition to keep interest rates close to zero.

Oil and gold prices also rebounded after earlier losses.

The Dow Jones Industrial Average closed 30.46 points, or 0.3%, higher at 10,437.42, 10,407.

Stocks on Wall Street extended their losing streak to four days as consumer companies fell on reports that signalled the economy might be struggling to recover.

Earlier, European markets fell for a third day while Canadian shares rallied on rising oil and gold prices.

Walt Disney, Boeing and Home Depot dropped after ADP Employer Services said employers cut 298,000 jobs last month and the government reported slower-than-forecast growth in factory orders.

The strong rally in world sharemarkets, taking prices to their highest in 10 months, has petered out as positive economic data was offset by some disappointments.

New home purchases in the US rose 9.6% last month, boosting Home Depot 1.5%. GE, 3M and Caterpillar all slumped more than 1% after durable goods orders, excluding cars, trucks and airplanes, climbed less than economists projected.

US Steel dropped 2.4% as China said it might seek to reduce overcapacity among steel and cement producers.

Stocks on Wall Street retreated after Monday's strong rally, pushed down by a surprisingly weak report on the housing market that offset gains by commodity and energy producers.

The Dow Jones Industrial Average closed 29.23 points down, or 0.3%, at 8474.85, weighed down by a slide of 5.3% for Home Depot after the home-improvement giant posted stronger-than-expected earnings but said its sales and margins declined.