Wall Street rallies for fourth day

Stocks on Wall Street rose as market tensions eased across Europe and speculation rose on a further central bank stimulus to the US economy.

The Federal Reserve's policy-setting committee has begun a two-day meeting with a statement due out around midday Wednesday (Thursday morning, NZ time).

A possible outcome is additional purchases of government securities or a variation of an existing programme set up to extend maturities of the Fed's bonds.

The Dow added 85.51 points, or 0.8%, to 12,837.33 at the close – its third substantial rise in four sessions.

The S&P 500 rose 1.0%, to 1357.98,and the Nasdaq Composite rose 1.3%, to 2929.76. It was the fourth session of gains for both benchmarks.

For the technology-heavy Nasdaq, it is longest winning streak since February.

All 10 of the S&P 500's sectors rose, led by materials. Financial stocks followed closely behind, with Bank of America gaining to lead the Dow's advance.

Microsoft, also a Dow component, jumped after it unveiled its Surface tablet computer that will compete with Apple's iPad.

Other markets: Spanish shares rise
A Spanish debt auction drove a stocks rally in Madrid and delivered relief more broadly for European markets.

The yield on the 10-year government bond fell just below the critical 7% level to 6.99%, well off the euro-era high of 7.17% reached on Monday.

The Stoxx Europe 600 index closed up 1.6% at 248.27. The UK's FTSE 100 finished 1.7% higher at 5586.31, Germany's DAX ended up 1.8% at 6363.36 and France's CAC-40 rose 1.7% to 3117.92.

Spain's IBEX-35 closed up 2.7% at 6693.90, Italy's FTSE Mib added 3.4% to 13,445.46 and Greece's ASE gained 3.3% at 600.07.

Commodities: Oil slump continues
Crude-oil futures posted a slight loss as news of the eurozone credit crisis and its potential to squelch oil demand dominated the market.

Light, sweet crude for July delivery settled down 76USc, or 0.9%, at $US83.27 a barrel.

Crude prices have fallen nearly 25% from their highs this year of $US110 a barrel.

Currencies: Euro rises
The US dollar lost ground as the euro pushed above $US1.27, reflecting the attention investors are paying to the Fed policy meeting.

The euro was at $US1.2721 from $US1.2575 late on Monday, while the dollar slipped to ¥78.91 from ¥79.11.

The UK pound was fetching $US1.5751, while the dollar buying 0.9440 Swiss franc, down from 0.9551 franc.