US stocks recover to lift market to fresh 17-month high

After a shaky start to the day's trading, blue-chip industrial stocks staged a late rally on positive manufacturing and employment news.

The US Labour Department reported that jobless claims fell slightly last week, the third consecutive decline, while the consumer price index remained flat last month.

The Federal Reserve Bank of Philadelphia reported that manufacturing and business activity continued to climb in the mid-Atlantic area.

The Dow Jones Industrial Average advanced 47.69 points, or 0.5%, to close at 10,733, the highest since October 1, 2008.

Among Dow stocks, DuPont rose 1.7% while Boeing climbed 1.5%. Hewlett-Packard added 0.8%, after settling its lawsuit against several printer-cartridge makers.

Weighing on the index, banking stocks fell amid concern over the financial regulatory overhaul proposal winding through Congress.

The S&P 500 index finished 0.6% up at a 17-month high of 1166.22, held back by the energy sector as crude-oil prices crept below $US83 per barrel. Materials and financials also slipped, but industrials and consumer discretionary stocks helped offset the decline.

The Nasdaq Composite rose 0.5% to 2389.09, its highest close since August 28, 2008.

Other markets

European stocks came off earlier lows as concerns over Greece's debt came to the fore again.

Later in the session, the Greek finance minister denied earlier comments that the country would be going to the IMF.

The Stoxx Europe 600 Index was up 0.1% at 261.7. London's FTSE 100 was 0.1% higher at 5652.7, Frankfurt's DAX was flat at 6025.6 and Paris's CAC-40 was 0.1% lower at 3954.8.

Most Asian markets declined, with Japanese exporters dragged lower as the euro weakened against the yen.

Shipbuilding stocks in the region were hurt by news of an order cancellation for South Korea's Hyundai Heavy Industries Co. In Tokyo, Mazda dropped 2% and Nikon slumped 4.2%.

Japan's Nikkei Stock Average of 225 companies ended 1% lower at 10,744.03, South Korea's Kospi dropped 0.5% to 1675.17, Hong Kong's Hang Seng Index gave up 0.3% to 21,330.67 and China's Shanghai Composite slipped 0.1% to 3046.09 after a choppy session.

Ranking among gainers, India's Sensex rose 0.3% to 5245.90, Australia's S&P/ASX 200 rose 0.2% to 4863.11, while Taiwan's Taiex advanced 0.5% to 7886.34.

Commodities: Oil, gold down

After settling at a two-month high on Wednesday, oil dropped on reports that Greece may be forced to seek a bailout from the IMF.

The news caused the dollar to strengthen against the euro, putting pressure on oil prices due to a stronger dollar making oil more expensive for holders of other currencies.

Light, sweet crude for April delivery settled 73USc, or 0.9%, lower at $US82.20 a barrel in New York. Brent crude on the ICE futures exchange was 48USc lower at $US81.48 a barrel.

Gold gained support as investors become increasingly distrustful of currencies backed by nations whose sovereign debt loads continue to mount.

So far this year, dollar-denominated spot gold has risen 2.8%, while the metal has gained 7.6% in the euro and 8.6% in the pound, reaching record highs in both currencies earlier this month. It's up 5.1% in the Swiss franc and 1.3% in Japanese yen.

The April contract settled $US3.30, or 0.3%, higher at $US1127.50 an ounce as the dollar gained against the euro.

Currencies: Dollar up, euro down

The euro sank to a one-week low against the dollar and the yen in a volatile session marked by talk that Greece could seek aid from the IMF.

Uncertainty continues to surround the prospect of financial aid for Greece, which faces more than €20 billion in debt refinancing in the next two months. The Greek government ratcheted up pressure on its EU partners, calling for a support programme to be decided at a leaders' summit on March 25.

The euro was at $US1.3609 from $US1.3741 late on Wednesday. The dollar was at ¥90.35 from ¥90.27, while the euro was at ¥122.96 from ¥124.04 yen.

The pound was at $US1.5239 from $US1.5326.