Wall Street rallies as eurozone crisis eases

Stocks on Wall Street bounced back from their biggest one-day fall in more than six weeks.

In the US, unemployment figures fell to the lowest level in seven months, while debt crisis fears eased in Europe. France's credit rating was affirmed after reports of a downgrade and technocrats were likely to lead interim governments in Italy and Greece.

Greece named a former central banker, Lucas Papademos, as its new prime minister. In Italy, now the major cause of concern, a new coalition government is expected to be led by Mario Monti, a former European Commissioner and economist.

In the markets, 10-year bonds came off their highs amid trader talk that the European Central Bank was a buyer.

Italy’s budget bill is expected to be approved by the weekend and pave the way for Prime Minister Silvio Berlusconi to resign.

On Wall Street, the Dow Jones Industrial Average was up 112.92 points, or 1.0%, to 11,893.86 at the close (10am NZ time). It rose as high as 180 points during the session.

This followed a 389-point drop the previous day, its biggest decline since September 22 and sixth-largest fall this year.

The S&P 500 index was up 0.9% to 1239.70, led higher by industrial and energy stocks. Nine of the 10 S&P 500 sectors rose with financials being the exception.

The Nasdaq Composite edged up 0.1% to 2625.15.

Other markets: Europe, Asia down
European stocks turned lower, with the Stoxx Europe 600 falling 0.4% to 235.35. 235.48.

London's FTSE 100 fell 0.6% to 5430.01, Frankfurt's DAX was 0.4% higher at 5852.52 and Paris' CAC-40 was flat at 3075.55..

Asian bourses slumped, reacting to Wednesday's falls in the US and Europe.

Japan's Nikkei Stock Average dropped 2.9%, Australia's S&P/ASX lost 2.4% and Korea's Kospi tumbled 4.9%.

Hong Kong's Hang Seng Index dived 5.3%, while China's Shanghai Composite lost 1.8%. India's market was closed for a holiday.

In commodities, crude oil futures rose 1.8% to above $US97 a barrel. Gold futures dropped 2.4% to below $US1748 an ounce.

On currency markets, the US dollar fell against the euro and the yen.