Oil surge pushes Wall Street higher

Stocks on Wall Street rose in a shortened pre-July 4 Independence Day holiday session as surging oil prices bolstered energy shares and factory orders rebounded more than expected.

US-listed shares of Barclays fell 2.1% after chief executive, Robert Diamond, resigned as a result of an interest-rate manipulation scandal.

Crude-oil futures leapt nearly 5% on a flare-up of geopolitical concerns about Iran. An army general in Iran was reported as saying the country wouldn't "sit idly" by as the US and Europe built a missile-defence shield programme that could target Iran.

Orders for manufactured goods rose 0.7% in May, topping economists' average projection for a 0.1% increase. April's reading, though, was revised to a sharper decline than initially reported.

The Dow Jones Industrial Average climbed 72.43 points, or 0.6%, to 12,943.82. The S&P 500 index added 0.6%, to 1374.02 and the Nasdaq Composite rose 0.8%, to 2976.08.

Energy shares led advances in six of the S&P 500's 10 sectors as oil prices rallied on revived tensions over the Iranian nuclear programme and renewed speculation about more central-bank easing.

Wall Street closed three hours early at 1pm (5am NZ time).

Other markets: Europe, Asia up
The Stoxx Europe 600 jumped 1% to 257.39 on continued hopes that the European Central Bank will cut its key interest rate later this week.

May producer prices in the eurozone were up 2.3% from the same month a year ago, the smallest year-over-year increase since March 2010.

Spain's IBEX 35 index rose 1.3% as jobless claims in the country fell 2.1% in June, the third consecutive monthly drop.

The UK's FTSE 100 ended up 0.8% at 5687.73, Germany's DAX closed 1.3% higher at 6578.21 and France's CAC-40 added 1% to 3271.20.

Asian markets were mostly higher, with Japan's Nikkei Stock Average rising 0.7% to 4127.20 and China's Shanghai Composite adding 0.1% to 2229.19.

Hong Kong’s Hang Seng Index was up 1.5% to 19,735.53 after being closed on Monday for a holiday,

Australia's S&P ASX 200 eased 0.1% to 4127.20 after the Reserve Bank left its key interest rate unchanged.

Commodities: Oil surges on Iran threat
After Monday's losses of 1.4%, oil traders were back to worrying about a potential disruption in oil markets as Iran chafed against Western sanctions, which started on July 1.

Crude for August delivery gained $US4.03, or 4.9%, to $US87.80 a barrel in New York Mercantile. The front-month contract had earlier traded as low as $83.33 a barrel.

Gold futures rose 1.6% to $US1,622.60 an ounce.

Currencies: Euro rises
The euro strengthened modestly against the US dollar and the yen. The euro was at $US1.2609 compared with $US1.2576 late on Monday.

The dollar was at ¥79.86 compared with ¥79.51, while the euro was at ¥100.70 from ¥100.03.

The UK pound bought $US1.5691 compared with $US1.5693, while the dollar fetched 0.9526 Swiss franc from 0.9551 franc.