Euro bailout plan lifts Wall St stocks

Stocks on Wall Street advanced the most in a month on hopes for a more aggressive approach to Europe's sovereign-debt crisis than has occurred so far.

Latest reports say officials have moved closer to agreement on boosting the firepower of its €440 billion fund through borrowing.

But such a plan is still subject to agreement by 17 euro-zone legislatures and some officials say this could take weeks.

Bank shares on both sies of the Atlantic rose on comments from a European central bank member that a reduction in interest rates cannot be ruled out.

At the close (9am NZ time), the Dow Jones Industrial Average had climbed 272.38 points, or 2.5%, to 11,403.86 after a session in which eary gains were pared back, only to bounce back more strongly in the final hour.

The S&P 500 index gained 2.3% to 1162.15 while the Nasdaq Composite recovered from earlier losses to put on 1.35% to 2516.69.

Apple lead a weakness in technology stocks, shedding 0.3% after JP Morgan Chase analysts said production of iPads would be cut due to reduced demand.

Freescale Semiconductor contributed to the weak tone by cutting its sales outlook for the third quarter. Its shares were down 1.0%.

Other markets: Europe up, Asia down
European stock markets rose sharply as banks rebounded on hopes for an expansion of the euro-zone bailout program and a possible interest-rate cut.

The Stoxx Europe 600 index rose 1.9% to 220.28, having slumped more than 6% in the previous week.

Germany's DAX 30 index rallied 2.9% to 5345.56, the French CAC 40 index rose 1.8% to 2859.34 and the UK’s FTSE 100 index was up 0.5% to 5089.37.

Earlier, Asian stocks fell sharply on a lack of apparent progress on Europe's sovereign-debt problems.

Japan's Nikkei Stock Average ended down 2.2% at 8374.13, making up for lost time Friday when the Tokyo market was closed for a holiday. It was the index's lowest close since April 2009.

Hong Kong's Hang Seng Index fell 1.5% to 17,407.80, at one point dipping below 17,000 for the first time since May 2009.

The Shanghai Composite Index lost 1.6% to 2393.18, its lowest close since July 2010. Korea's Kospi lost 2.6% to 1652.71, its lowest close since June 2010, and Australia's S&P/ASX 200 index declined 1% to 3863.9.

Commodities: Oil stays above $US80, gold below $US1600
Crude futures ended slightly up though the overall tone of the market remained bearish.

Light, sweet crude for November delivery settled 39USc higher, or 0.5%, at $US80.24 a barrel in New York. Brent crude futures on the ICE Futures Europe were down 3USc to $US103.94 a barrel.

Gold hovered around $US1600 an ounce. The contract for September delivery was down $US21.40, or 1.3%, at $US1616.10 an ounce in New York.

Currencies: US dollar lifts
The US dollar turned up against the euro, which was at $US1.3479, compared with $US1.3499 late on Friday.

The dollar was at ¥76.41 from ¥76.58, while the euro was at ¥103.01 compared with ¥103.70.

The UK pound traded at $US1.5531 from $US1.5455, while the dollar bought 0.9056 Swiss franc from 0.9058 franc.