Markets rise ahead of next euro summit

Stocks on Wall Street rose but ended off their highs on reports of further credit rating downgrades in Europe. UPDATED

Earlier, shares advanced strongly to gain 130 points on further signs European leaders are serious about tackling the sovereign-debt crisis ahead of a key summit late this week.

But late in the session unconfirmed reports suggested Standard & Poor's was about to cut the triple A ratings of Germany, France, Luxembourg, Austria, the Netherlands and Finland.

(It has since been confirmed S&P has put the ratings of 15 eurozone nations on "credit watch negative" -- including the six above -- on grounds of tightening credit conditions and disagreements among European policymakers on how to tackle the region's immediate and long-term economic challenges.)

The Dow Jones Industrial Average was up 78.41 points, or 0.6%, to 12,097.83 at the close (10am NZ time). 

The S&P 500 index gained 1.0% to 1257.08 and the Nasdaq Composite added 1.1% to 2655.76.

The Dow built on a 788-point surge last week, its biggest weekly percentage gain since mid-July 2009, after central banks infused the global financial system with cheap dollar loans.

Stronger US economic data has been a factor but the focus is still on Europe.

French President Nicolas Sarkozy and German Chancellor Angela Merkel completed a new fiscal-policy accord whose features included automatic sanctions for countries that run unsustainable budget deficits and private-sector contributions in future bailouts.

Earlier, newly installed Italian Prime Minister Mario Monti outlined a three-year plan of €30 billion in tax increases, spending cuts, pension overhauls and growth-boosting measures.

Other markets: Europe up, Asia mixed
European stock markets finished higher as optimism grew over greater fiscal unity between European leaders,

The Stoxx Europe 600 index closed up 0.8% to 242.75. The UK's FTSE 100 index rose 0.3% to 5567.96, France's CAC-40 index jumped 1.1% to 3201.28 and Germany's DAX advanced 0.4% to 6106.09.

Italy's FTSE MIB rose 2.9%, while Spain's IBEX 35 index added 1.8%.

Asian markets ended mostly higher as investors hoped for progress in Europe's debt crisis.

Hong Kong's Hang Seng Index finished 0.7% higher at 19,179.69, Japan's Nikkei Stock Average rose 0.6% to 8695.98, Korea's Kospi gained 0.4% to 1922.90 and Australia's S&P/ASX 200 rose 0.8% 4321.3.

The Shanghai Composite Index bucked the regional trend, however, losing 1.2% to 2333.33.

Commodities: Oil steady, gold down
Crude-oil futures pushed above $US102 a barrel before sliding back.

Light, sweet crude for January delivery settled at $US100.99 a barrel in New York, a rise of just 3USc.

Brent crude on ICE Futures Europe settled 13USc higher at $US109.81 a barrel.

The gold contract for December delivery settled down $US16.30, or 0.9%, at $US1730.70 an ounce in New York.

Currencies: Euro rises
The euro rose to a new session high on hopes the issues at the heart of the euro zone's debt crisis are closer to being tackled.

The euro was at $US1.3449 from $US1.3390 late on Friday. The US dollar traded at ¥77.79 compared with ¥77.98, while the euro was at ¥104.62 compared with ¥104.40.

The UK pound fetched $US1.5669 compared with $US1.5598, while the dollar bought 0.9186 Swiss franc from 0.9213 franc.