Wall St breaks three-day losing streak

Stocks on Wall Street snapped a three-day slide as investors saw hope for further economic stimulus from the US Federal Reserve.

Fed chairman Ben Bernanke said the Fed was "prepared to respond" if stimulus was needed. Those hopes were bolstered by signs of slowing price inflation, after import prices fell last month for the first time in a year.

“The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support," Mr Bernanke told the Congress as he delivered the central bank's semi-annual report on the state of the economy.

The Dow Jones Industrial Average rose 44.73 points, or 0.4%, to finish at 12,491.61 (8am NZ time) after rising higher earlier in the session. In the past three days the Dow had shed 273 points in its deepest decline in more than a month.

Materials and energy stocks led the gains, helped by a fall in oil inventories, while consumer-discretionary and industrial stocks were close behind. Caterpillar rose 2.7%, Alcoa climbed 1.7% and General Electric added 2%.

The S&P 500 index advanced 0.3% to 1317.72 and the Nasdaq Composite gained 0.4%, to 2792.95.

Other markets: Europe, Asia rebound
European stocks ended three days of heavy selling as investors looked to latest Chinese data showing that economy expanded 9.5% in the second quarter, faster than the 9.4% that was expected, though slightly slower than the first quarter's 9.7%.

The Stoxx Europe 600 index rose 0.7% to 269.94. In London, the FTSE 100 rose 0.6% to 5906.43. BSkyB added 2% despite News Corporation withdrawing its offer for the company amid a phone hacking scandal at the now-closed News of the World newspaper.

In Frankfurt, the DAX leapt 1.3% to 7267.87 and in Paris the CAC-40 rose 0.5% to 3793.27,

In Asia, Hong Kong and Chinese benchmarks rose on the strong economic data. The Hang Seng index climbed 1.2% to end at 21,926.88. China's Shanghai Composite gained 1.5% to 2795.48.

Japan's Nikkei Stock Average firmed 0.4% to 9963.14, Australia's S&P/ASX 200 index added 0.4% to 4514.8, Korea's Kospi advanced 0.9% to 2129.64 and India's Sensex gained 1% to 18,596.02.

Commodities: Gold hits fresh record
Oil futures turned higher after the US Department of Energy said oil inventories fell more than expected last week.

Light, sweet crude for August delivery rose $US1.31, or 1.4%, to $US98.84 a barrel in New York after earlier hitting an intraday low of $US96.53 a barrel.

Brent crude on ICE Futures Europe exchange rose $US1.53, or 1.3%, to $US119.28 a barrel.

Gold leaped to a fresh record with the most actively traded contract, for August delivery, touching a $US1,586.20 an ounce in New York.

Currencies: US dollar slumps on easing comments
The US dollar set a record low against the Swiss franc and fell sharply versus the euro on Mr Bernanke's warning that the economy may require additional monetary easing.

The dollar slumped to 0.8193 against the Swiss franc and to below ¥79.

The euro was at $US1.4147 from $US1.3976 late on Tuesday. The dollar was at ¥79.03 from ¥79.24, while the euro was at ¥111.80 compared with ¥110.75.

The UK pound fetched $US1.6098 from $US1.5913. The dollar bought 0.8187 franc from 0.8307 franc.