Obama jobs package ignites share rally

Stocks on Wall Street ended a three-day slide after reports that President Barack Obama will propose a $US300 billion package to boost jobs in a speech to Congress on Thursday.

The rebound was led by the banking and energy sectors. Energy stocks rose as oil surged about 4% to above $US89 a barrel.

The Dow Jones Industrial Average surged 275.41 points, or 2.5%, to.71 at the close (8am NZ time). The Dow had fallen 4% in the past three sessions.

Chevron added 3.4% and Exxon Mobil advanced 3.3%. Bank of America rallied 5.9% after a management team shakeup, while Morgan Stanley gained 5.3% and Citigroup added 4.2%.

Technology stocks also fared well, with Yahoo getting a 4.9% lift after the company said Carol Bartz had been removed as chief executive. It named chief financial Ooficer Tim Morse as interim CEO.

The S&P 500 index has advanced 2.5% to 1195, while the Nasdaq Composite has advanced 2.6% to 2539.

Other markets: Europe, Asia rebound
European equity markets rallied after three days of losses. Greek stocks surged 8% after Germany's Federal Constitutional Court ruled against plaintiffs seeking to block bailouts of indebted euro-zone nations.

But the court said the government would have to get approval from the parliament's budget committee before participating in future bailouts.

The Stoxx Europe 600 index rose 3.1% to end at 228.84. The index fell on Tuesday to the lowest closing level since July 29, 2009.

The German DAX 30 index rallied 4.1% to 5405.53, France's CAC 40 index gained 3.6% to 3073.18 and the UK’s FTSE 100 rose 3.1% to 5318.59.

Asian markets rallied as investors jumped into stocks tied to global economic growth. Shares of Japanese exporters benefited from a Swiss-made drop in the yen.

Korea's battered Kospi jumped 3.8% to 1833.46, its first gain in four sessions. Australia's S&P/ASX 200 index climbed 2.7% to 4183.40 and Japan's Nikkei Stock Average rose 2% to 8763.41.

Hong Kong's Hang Seng Index rose 1.7% to 20,048.00, while the Shanghai Composite Index advanced 1.8% 2516.09. India's Sensex rose 1.2% to 17,065.00, its highest close since August 11.

Commodities: Oil up, gold plunges
Oil futures rose sharply as broader markets reacted favourably to President Obama's jobs plan and the German court ruling on eurozone bailouts.

Light, sweet crude for October delivery settled up $US3.32, or 3.9%, to $US89.34 a barrel in New York. Brent crude on ICE Futures Europe traded up $2.60, or 2.3%, to $115.49 a barrel.

Gold fell below $US1800 for the first time in five trading sessions as stronger equity markets lured away investors.

Gold for September delivery settled down $US55.70, or 3.0%, at $US1814.20 an ounce in New York. The contract touched a low of $US1792.80.

Currencies: US dollar drops
The US dollar declined while the euro temporarily spiked higher after Germany’s top court approved euro-zone bailouts.

The euro rose to $US1.4090 from $US1.3983 on Tuesday and traded at 1.2098 Swiss francs, up from 1.2055.

The US dollar also stayed down against its Canadian counterpart after the Bank of Canada left its key rate unchanged at 1%. The greenback slipped 0.3% to buy 98.69Cc.

The US dollar fell to ¥77.33 from ¥77.69.