Quake fails to stall Wall St advance

Stocks on Wall Street made sharp gains despite another bleak dose of economic data  -- and a major earthquake on the east coast of North America.

Investors are increasingly optimistic that Federal Reserve chairman Ben Bernanke will act later this week to spur economic growth.

On the economic front, the Richmond Fed's regional manufacturing survey for August fell below expectations, while new home sales in July dropped to the lowest level in five months.

Stocks pared some earlier gains after the earthquake of magnitude 5.9 hit Virginia. Tremors were felt in Washington, DC, and as far north as New York City.

Traders on the New York Stock Exchange floor said the earthquake was noticeable but didn’t an impact on trading. However, airports were temporarily closed. No major damage was reported though government buildings in Washington were evacuated.

The euro gained ground against the US dollar, oil prices rose and gold retreated from recent highs.

At the close (8am NZ time), the Dow Jones Industrial Average was up 322.11 209 points, or 3%, to 11,176.76, led by Exxon Mobil and DuPont. All stocks except Bank of America, which fell 4.2%, advanced.

The S&P 500 index rose 3.4%, to 1162.31, as energy, technology and consumer discretionary stocks registered the strongest gains. The technology-oriented Nasdaq Composite rallied 3.4% to 2446.06.

Other markets: Europe up, Asia down
European stocks ended up after a choppy session buoyed by strong manufacturing data from China. Its manufacturing purchasing managers index for August came in significantly better than expected, at 49.8 from a final reading of 49.3 in July.

The Stoxx Europe 600 index gained 0.8% to 226.63.

The UK's FTSE 100 index added 0.7% to 5129.42, France's CAC-40 index rose 1.1% to 3084.37 and Germany's DAX advanced 1.1% to 5532.38.

Most Asian markets surrendered gains to end lower.

Japan's Nikkei Stock Average ended 1% lower at 8623.13, as hopes that authorities would intervene to curb the yen's strength pulled the currency back from a postwar record level against the dollar.

Korea's Kospi slid 2% to 1710.70, China's Shanghai Composite dropped 0.7% to 2515.86, Australia's S&P/ASX 200 index lost 0.5% to 4082.3 and Taiwan's Taiex fell 0.4% to 7312.59.

Commodities: Oil rises, gold drops
Oil futures shot higher, as traders looked past the latest fighting in Libya to focus on a midday stock market rally in the US.

Crude futures had wobbled between positive and negative territory earlier in the session, as reports of fresh fighting in Tripoli highlighted the uncertainty of the rebels' hold over the Libyan capital.

Light, sweet crude for October delivery in New York was up $US1.29, or 1.5%, to $US85.71 a barrel. The contract had traded as low as $US83.40 before bouncing back.

Brent crude, which is more sensitive to events in Libya, was up $US1.03, or 1%, to $US109.39 a barrel.

Currencies: Dollar dips as euro rises
Weak economic data pressured the dollar and fed speculation Dr Bernanke may surprise markets by announcing a new round of monetary stimulus on Friday.

Fears are mounting that the US economy is decelerating sharply or even heading toward another recession.

The euro was at $US1.4415, from an overseas trading high of $US1.45, compared with $US1.4358 late on Monday.

The dollar was at ¥76.67 from ¥76.79, while the euro was at ¥110.52 from ¥110.25.

The UK pound bought $US1.6497 from $US1.6453, while the dollar fetched 0.7912 Swiss franc from 0.7902 franc.