World stocks surge as oil dips

Stocks on Wall Street surged as a strong reading on US employment and a drop in the price of oil helped investors breathe a sigh of relief.

The number of workers filing new unemployment claims unexpectedly fell 20,000 to 368,000, the lowest level since May 2008.

Crude-oil futures fell, trading under $US102 a barrel.

The Institute for Supply Management's reading on non-manufacturing came in slightly ahead of expectations.

At the close, the Dow Jones Industrial Average was up 191.70 points, or 1.6%, to 12,258.50. Dupont was strongest, rising 3.3%, followed by General Electric, up 2.6%. The S&P 500 index gained 1.7%, to 1330.97, led by its industrial and financial sectors. The Nasdaq Composite soared 1.8% to 2798.74.

Other markets: Europe, Asia up
European stocks rose, led by Alcatel-Lucent and engineering group AMEC, as bullish corporate news and falling oil prices buoyed sentiment.

The Stoxx Europe 600 index climbed 0.3% to 283.55. In France, Alcatel-Lucent soared more than 7%, making it the top gainer in the CAC 40 index, which rose 0.7% to 4070.74. The UK’s FTSE 100 index advanced 1.5% to 6005.09 and Germany’s DAX 30 index gained 0.6% to 7225.96.

Most Asian markets advanced, with Korean equities staging a strong rebound as foreigners turned buyers and snapped up beaten-down stocks.

Japan's Nikkei Stock Average added 0.9% to 10,586.02, Hong Kong's Hang Seng Index climbed 0.3% 23,122.42, Korea's Kospi jumped 2.2% 1970.66, Australia's S&P/ASX 200 inched up 0.1% 4806.44 and Taiwan's Taiex finished 1.4% higher at 8738.37.

Only China went against the trend, with the Shanghai Composite falling 0.4% to 2902.98.

Commodities: Oil, gold down
Oil futures retreated but held above $US100 a barrel after reports that Libyan leader Muammar Gaddafi had accepted a plan for a peaceful resolution to the conflict.

Heavy fighting continued, with reports of pro-Gaddafi warplanes bombing the rebel-held oil town of Marsa el-Brega. Arab news service Al Jazeera reported Gaddafi had accepted a plan proposed by Venezuelan President Hugo Chávez that called for a mediation.

The International Energy Agency said up to one million barrels a day of Libyan crude output has gone offline, most of it destined for Europe.

Light, sweet crude for April delivery settled 32USc, or 0.3%, at $US101.91 a barrel in New York. Brent crude on the ICE futures exchange gave up $US1.53, or 1.3%, at $US114.82 a barrel.

Unexpectedly positive US economic data and the floating of a peace plan for Libya lessened investors' appetite for gold, prompting them to cash in on the record high price. The most actively traded gold contract, for April delivery, settled $US21.30, or 1.5%, lower at $US1416.40 an ounce in New York.

Currencies: Euro up, dollar down
The euro surged to its highest levels in more than three months against the dollar and yen, as an unequivocally forceful stance against inflation from the European Central Bank raised expectations that an interest-rate increase in the euro zone was imminent.

The euro pared some of its gains but was still nearly one cent higher on the day versus the dollar around $US1.3947, compared with $US1.3867 late on Wednesday. That was still its strongest level since November 9.

The euro changed hands around ¥114.88, its highest since November 22. Meanwhile, the dollar bought ¥82.40 from ¥81.89. The UK pound was at $US1.6260 from $US1.6327, while the dollar fetched 0.9310 Swiss franc from 0.9236 franc.