US stocks head for three-year high

A big teleco merger and positive speculation about US private sector jobs growth pushed stocks on Wall Street to a six-week high. All world markets were also up.

It is expected Friday's non-farm payrolls data will be positive and will add to evidence that the world's largest economy is firmly in recovery mode.

The ADP employment survey reported a 201,000 increase in private payrolls in March from 208,000 in February, broadly in line with consensus expectations.

At the close (9am NZT), the Dow Jones Industrial Average was up 71.60 points, or 0.6%, to 12,350.66, led by AT&T, which rose 2.2% after chief executive officer Randall Stephenson said he expected some divestitures as his company pursues a $US39 billion buyout of T-Mobile USA.

Earlier, the Dow rose to an intraday high of 12,383, less than 10 points below 12,391.25, its February 18 finish and highest close since June 5, 2008. Today's close was the highest since February 18.

The S&P 500 index was up 0.7% at 1328.26, helped by a 1.4% rise in its telecommunications sector, while the Nasdaq Composite also finished up 0.7% at 2776.79.

The Russell 2000 index of small-capitalisation stocks gained 1.1% to 838, touching its highest intraday level since October 2007.

Other markets: Europe, Asia up
European stocks closed up, spurred higher by confidence in rising US payrolls.

The Stoxx Europe 600 index ended up 0.7% at 278.55. The index closed up 0.6% on the quarter, despite the tsunami disaster and nuclear crisis in Japan and the unrest in Libya and the Middle East.

The UK's FTSE 100 increased 0.3% to 5948.30, Germany's DAX gained 1.8% to 7057.15 and France's CAC-40 closed 0.9% higher at 4024.44.

In Asia, Japanese stocks soared on a weakened yen and news some firms will soon restart production at plants affected by the devastating earthquake and tsunami. The Nikkei Stock Average climbed 2.6% to 9,708.79.

All other regional market rose. Solid results from Hutchison Whampoa and other corporations boosted Hong Kong shares. The Hang Seng index expanded 1.7% to 23,451.43.

Elsewhere, Australia's S&P/ASX 200 rose 1.4% to 4,822.20; Korea's Kospi gained 0.9% to 2,091.38; Taiwan's Taiex advanced 0.6% to 8,646.31; and India's Sensex rose 0.9% to 19,290.18 for a seventh straight session of gains.

Commodities: Oil drops marginally, gold up
A continued rise in US oil inventories extended early losses in New York futures trading.

Light, sweet crude for May delivery recently traded 70US c, or 0.8%, lower at $US104.04 a barrel after dropping as low as $US103.44. Brent crude on the ICE futures exchange traded 5USc lower at $115.11 a barrel.

Gold prices were slightly higher but remained in a tight range. The most actively traded contract, for June delivery, was recently up 0.8%, or $US11.40, at $US1428.90 an ounce in New York.

Currencies: Dollar continues to rise
The US dollar rose against the yen as investors grow wary of negative greenback bets ahead of non-farm payrolls data and expectations the Federal Reserve could soon move toward monetary policy normalisation.

The possibility of further G-7 intervention has been the key driver for three-week highs for the dollar.

The euro was at $US1.4138 compared with $US1.4103 late on Tuesday. The dollar was at ¥82.97 from ¥82.43.

The UK pound bought $US1.6062 from $US1.5996, while the dollar was at 0.9186 Swiss franc from 0.9207 franc.