By Agency Reporter

United States stocks rallied, sending the Dow Jones Industrial Average up the most in three months, as oil retreated and reports signaled the global economy is improving. The euro strengthened as the European Central Bank said an interest-rate increase may be coming.

Bloomberg News reported on Thursday that the Dow climbed 172.63 points, or 1.4 per cent, to 12,239.43 in New York and the MSCI Emerging Markets Index increased for a fifth day, the longest rally in two months.

The Stoxx Europe 600 Index pared gains amid concern borrowing costs will increase. The euro appreciated 0.5 per cent against the dollar and German two-year note yields jumped 21 basis points. Oil lost 0.5 per cent to $101.68 a barrel, falling from its highest price in more than two years.

US equities advanced for the fourth time in five days after jobless claims unexpectedly fell, underscoring the Federal Reserve’s assessment that the labour market is improving.

Other reports showed American service industries grew at the fastest pace in five years and South Korean industrial output expanded. ECB President, Mr. Jean-Claude Trichet, said policy makers must exercise “strong vigilance” as inflation risks increase.

“The US jobs data supports an improving economy,” the Chief Investment Officer at Stewart Capital in Indiana, Mr. Malcolm Polley, said. “There’s also some sort of relief about oil prices being down.

“Still, how much of an impact the recent spike in crude will have remains to be seen. It’s probably not going to impact spending all that much. However, the longer it holds on at these levels the more impact it’s going to have on inflation and spending.”

Industrial, financial and technology companies led gains in all 10 industry groups in the Standard & Poor’s 500 Index, which climbed 1.4 per cent for its biggest gain in a month.

Source: Punch