By Ishaq Siddiqi
Stocks rallied Wednesday amid cheers over the prospects of more action by the Federal Reserve to prod the U.S. economy and a larger-than-expected rebound in euro-zone industrial production.
Germany's DAX index reached a 2010 high, while gold soared to another record, oil prices gained and the euro rose against the dollar.
Positive third-quarter earnings out of the U.S. helped reinforce the positive tone in the market. Intel /zigman2/quotes/203649727/composite INTC -1.40% reported after the close Tuesday, making positive comments about the current quarter, and J.P. Morgan Chase /zigman2/quotes/205971034/composite JPM +0.02% reported a strong quarter prior to the U.S. open on Wednesday.
The Stoxx Europe 600 index added 1.4% to 266.25. The U.K.'s FTSE 100 closed up 1.5% at 5747.35, Germany's DAX added 2.1% to 6434.52 and France's CAC-40 closed up 2.1% at 3828.34.
The strong earnings set up U.S. stocks for a fourth straight day of gains, helped by a jump in Chinese demand for commodities amid a weaker dollar.
In late trading, the Dow Jones Industrial Average was up 115 points, or 1%, at 11135, the Standard & Poor's 500-stock index rose 1% to 1181 and the Nasdaq Composite advanced 1.2% to 2447.
Treasurys fell broadly, with the yield on the benchmark 10-year note rising to 2.475%. The fall in prices came as a $21 billion auction of Treasurys generated the lowest yield since January 2009, at 2.475%.
European energy and resource stocks jumped after China's trade surplus fell to a five-month low of $16.88 billion in September, largely due to a surge in commodity imports, especially oil. The Stoxx Europe 600 oil index gained 1.8%, while the Stoxx Europe 600 basic resource sector added 3.3%.
Also, euro-zone industrial production increased by 1% in August. The outcome would have been stronger were it not for a stunning 13.6% drop in Irish production.
Late afternoon in New York, the euro was at 1.3959, up from $1.3916 late Tuesday. The euro also rose against Japan's currency, trading at 114.13 yen from 113.91 yen, while the dollar was lower, at 81.78 yen from 81.85 yen. The U.K. pound was at $1.5890 from $1.5800 and the dollar was at 0.9605 Swiss francs from 0.9569.
In Asia, the Japanese market was lifted by a surprise rise in machinery orders, while the Chinese market was dragged down by weaker-than-expected trade data for September.
Gold futures resumed their climb on the Comex division of the New York Mercantile Exchange, jumping $23.80, or 1.8%, to $1,369.50 an ounce, as the dollar's weakness spurred demand. Light, sweet crude for November delivery rose 1.6% to $83.01 a barrel on the New York Mercantile Exchange.
On Thursday's economic agenda, market participants will closely watch reports on U.S. initial jobless claims, producer prices and the trade balance.
In major market action: Natural-resources shares gained after China's trade figures showed a surge in commodity imports. In London, Vedanta Resources climbed 5.9%, Anglo American jumped 5.4% and Xstrata added 4.4%.
Miner Fresnillo /zigman2/quotes/201300065/delayed UK:FRES -1.22% rose 3.3% after the firm reported an increase in third-quarter silver production and gave a bullish outlook.
In the energy sector, Petrofac /zigman2/quotes/202340229/delayed UK:PFC -0.29% rallied 4.2% after an upgrade to "overweight" from "equalweight" at Morgan Stanley, which said the company's order backlog looked set to accelerate.
Oil major BP /zigman2/quotes/207305210/composite BP -1.28% gained 1.8%, boosted in part by the rise in oil prices.
While banks posted broad gains, Standard Chartered /zigman2/quotes/200125072/delayed UK:STAN -2.11% stood out among decliners, falling 1.7% on news it will raise around £3.26 billion ($5.15 billion) in a rights issue priced at a 33% discount to its Oct. 12 closing price.
Chip-related companies were also pushing up regional indexes after a surge in profits for chip maker Intel in the U.S. on Tuesday. In London, shares of Arm Holdings rose 1.8%.
Another big mover in Europe was ASML Holdings, which rose 5%. The firm said third-quarter net income leaped to €269 million ($374 million) from 20 million a year earlier, as sales doubled. The lithography-systems maker also said it sees strong and continuous structural demand for its products.
Barbara Kollmeyer contributed to this article.
Write to Ishaq Siddiqi at email@example.com