Wall Street rises for third week, highest in 2 and 1/2 years

Blue chip stocks on Wall Street extended their winning streak to a third consecutive week, reaching their highest close since June 2008.

The market's upward momentum helped outweigh another round of monetary tightening in China and unrest in the Middle East.

The Dow Jones Industrial Average rose 73.11 points, or 0.6%, to 12,391.25. It rose 1% this week and has gained 4.8% over the past three weeks, marking its best three-week performance since August.

Among the Dow's top performers were Caterpillar, which added 2.4%, and Travelers, which rose 1.9%. Chevron was up 1.6% after a US judge delayed a decision on whether to grant an injunction prohibiting the enforcement of an $US8.6 billion judgment over environmental damage in Ecuador.

The Nasdaq Composite climbed 2.37 points, or 0.1%, to 2833.95, its highest close since October 2007. It is now down just 0.9% from its October 2007 high.

The S&P 500 index added 2.58 points, or 0.2%, to 1343.01, its highest close since June 2008.

Other markets: Europe down, Asia mixed
Mining stocks dropped after China took another step to cool its economy, though European markets were little changed.

The Stoxx Europe 600 index fell fractionally to 291.02, its first loss in six sessions, a day after closing at its highest level since August 12, 2008.

London's FTSE 100 index eased 0.1% to 6082.99, in Paris, the CAC 40 index edged up 0.1% to 4157.14 and in Frankfurt, the DAX 30 rose 0.3% to 7426.81.

In Asia, Chinese shares fell for the first time in seven sessions.

Korean stocks rose on a positive earnings outlook, while Hong Kong shares rode higher as Chinese airlines and banks gained on attractive valuations.

Hong Kong's Hang Seng index advanced 1.3% to 23,595.24, while Korea's Kospi and Taiwan's Taiex – both among the worst performing Asian benchmarks so far in February – gained 1.8% each to 2013.14 and 8843.84 respectively.

China's Shanghai Composite lost 0.9% to 2899.79, pulling back after a 5.5% climb over six days, after a report that the central bank may raise the reserve-requirement ratio for banks in the near term.

This was confirmed after the market closed. The increase takes effect on Thursday.

Japan's Nikkei Stock Average added 0.1% to 10,842.80, its fifth consecutive rise. In Sydney, the S&P/ASX 200 fell fractionally to 4936.73.

Commodities: Oil, gold up
Crude-oil futures edged higher in New York as traders prepared for a coming contract expiration, while another round of monetary tightening in China weighed on the European contract.

Light, sweet crude for March delivery rose 78US, or 0.9%, at $US87.14 a barrel. The contract expires on Tuesday, ahead of the three-day Presidents Day weekend.

Brent crude on the ICE futures exchange moved in the opposite direction, giving up 64USC, or 0.6%, at $US101.95 a barrel.

Another round of Chinese monetary tightening brought gold down from five-week highs.

The most-actively traded contract, for April delivery, was 60USc higher at $US1385.70 an ounce in New York.

Currencies: Euro, pound up
The euro rallied broadly after remarks from a European Central Bank member revived expectations of higher interest rates. Executive board member Lorenzo Bini Smaghi said rising price pressures must be monitored more vigilantly.

The comments weren't substantively different from those made by other ECB policymakers recently. But in an environment where US interest rates are expected to remain low long term, any talk of higher rates invariably boosts European currencies and sidelines the dollar.

The euro was at $US1.3686, compared with $US1.3606 late on Thursday. The US dollar weakened to ¥83.11 from ¥83.31.

The euro strengthened to ¥113.74 from ¥113.35. The pound strengthened to $¨ß1.6234 from $¨ß1.6169.

The dollar weakened to 0.9458 Swiss franc from 0.9493 franc.