While you were sleeping: UPDATED Oil prices, economy lift Wall St stocks

Wall Street rose, with the Dow climbing to a fresh record, as did oil prices as investors chose to focus on the prospect of an improving US economy and shook off the results of an Italian referendum.

At the close, the Dow Jones Industrial Average rose 45.82 points, or 0.2%, to 19.216.24.

The Nasdaq Composite Index climbed 1.0% to 5308.89, while the Standard & Poor's 500 Index gained 0.6% to 2204.71. It touched a record high of 19,274.85 during the session.

"Over the past few months, we had this increasingly pessimistic outlook on the stock market and the economy," Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management, told Reuters.

US President-elect Donald "Trump has been sort of a wake-up call for some complacent investors to take a look and see that inflation was moving higher and the economy is improving," he added.

The Dow advanced as gains in shares of Nike and those of Goldman Sachs, up 2.8% and 2.1% respectively, outweighed declines in shares of UnitedHealth and those of Merck, down 2.1% and 0.9% respectively.

HSBC plugs Goldman Sachs
HSBC initiated coverage of Goldman Sachs with a "buy" rating and a $US250 price target, according to media reports.

US Federal Reserve officials flagged higher interest rates.

"Assuming the economy stays on this trajectory, I would favour making monetary policy somewhat less accommodative over time by gradually pushing up the level of short-term interest rates," New York Fed president William Dudley said.

The Federal Open Market Committee is widely expected to announce a rate hike at the end of its two-day meeting on December 14.

"We are on the cusp of a period of rising interest rates," Chicago Fed president Charles Evans Evans told reporters after a speech, according to Reuters.

A report by the Institute for Supply Management showed its non-manufacturing index rose to a higher-than-expected 57.2 in November, up from 54.8 in October.

Communications companies agree to merge
In the latest corporate deals, shares of FairPoint Communications soared 11.9 % after Consolidated Communications said it agreed to buy the company for about $US1.5 billion, including debt. Shares of Consolidated traded 4.1 % lower.

In Europe, the Stoxx 600 Index finished the session with a 0.6% increase from the previous close. The UK's FTSE 100 Index rose 0.2%, France's CAC 40 Index gained 1%, and Germany's DAX Index rallied 1.6%.

Investors shrugged off the results of Italy's referendum, which prompted Prime Minister Matteo Renzi to resign.

"A 'no' vote was already priced in, and the bottom line is this wasn't a major risk event for market-it wasn't a vote on EU membership," Sylvain Loganadin, a market analyst at FXCM in Paris, told Bloomberg.

"Now that this is behind us, people are buying the dip, betting on a catch-up rally in Europe."

Euro recovers against US dollar
The euro rose 0.9% against the US dollar at $US1.0762, recovering from earlier losses.

Oil prices gained, touching the highest level since July 2015. Brent crude rose as high as $US55.33 a barrel, while US crude West Texas Intermediate gained as high as $US52.42 a barrel.

"Opec sentiment continues to support oil markets," Hans van Cleef, senior energy economist at ABN Amro in Amsterdam, told Reuters.

"Speculative short positions are still at elevated levels and as more traders unwind these positions they could trigger more support for oil prices."

(BusinessDesk)