FROM MORRISON SECURITIES PTY. LTD:

U.S. STOCK MARKETS

A surprisingly strong reading on domestic manufacturing fueled a rally in stocks and drove Dow industrials to their highest level in more than four years.

The Dow Jones Industrial Average rose 65.69 points, or 0.5%, to 13279.32, its best close since Dec. 28, 2007. The Standard Poor's 500-stock index tacked on 7.91 points, or 0.6%, to 1405.82 and the Nasdaq Composite gained 4.08 points, or 0.1%, to 3050.44.

After a mixed open, stocks jumped following the Institute of Supply Management's report that showed the U.S. manufacturing sector's expansion rose to its highest level in nearly a year in April.

The Dow coasted with triple-digit gains for most of Tuesday, but gave back some gains in the final hour. Investors said the better-than-forecast report comes at a key juncture for stocks.

Both the S&P 500 and Nasdaq finished April with their first monthly declines this year, while the Dow eked out a narrow gain last month. Energy stocks led as all 10 of the S&P 500's sectors rose.

Chesapeake Energy jumped 6.3% to $19.60 after the company's board and Chief Executive Aubrey McClendon agreed to separate the roles of CEO and chairman. The company also announced the early termination of a participation program that gave McClendon stakes in thousands of oil and gas wells.

McClendon will remain as CEO, but will relinquish his role as chairman. Shares slipped after the closing bell after Chesapeake reported a first-quarter loss.

Bank of America rose 2.5% to 8.31, and was the Dow's biggest gainer, after The Wall Street Journal reported it has plans to cut about 2,000 jobs in its investment banking, commercial banking and non-U.S. wealth-management units, citing people familiar with the matter.

Sears Holdings jumped 15% to 62.05 after the retailer said it expects to announce an improvement in operations at its namesake stores when it posts first-quarter results next month. Ford Motor fell 0.4% to 11.23, after reporting that new-vehicle sales fell 5% in April from the prior year.

General Motors rose 1.4% to 23.31 after reporting an 8.2% sales decline, though the company raised its full-year forecast for light-vehicle sales. Meanwhile, Chrysler Group's U.S. auto sales rose 20% in April as the auto maker saw particular strength in its namesake brand.

EUROPEAN STOCK MARKETS

European stocks rose in holiday trading Tuesday, after data showed a surprise improvement in U.S. manufacturing activity, while banks gained in London after well-received earnings from Lloyds Banking Group PLC. Most bourses apart from London and Dublin were closed for May Day.

The Stoxx Europe 600 index rose 0.4% to 258.37, after trading with no clear direction for most of the day. The index was sent higher in afternoon trade as a report showed the U.S. manufacturing sector unexpectedly expanded at a faster pace in April.

The Institute for Supply Management's index climbed to 54.8% from 53.4% in March. U.S. Chemring Group PLC posted the biggest gain, with shares surging 20% after the defense company announced a U.S. Army contract worth $161 million. Also higher, Rolls-Royce Holdings PLC gained 3.6% in London. The firm clinched a $315million contract from aircraft engine maker Pratt & Whitney.

ASIA-PACIFIC STOCK MARKETS

Asian stock markets ended mixed Tuesday, with renewed strength in the Japanese yen and some disappointing earnings reports hurting Tokyo equities, while shares in Sydney jumped after a bigger than-expected interest rate cut from the Reserve Bank of Australia.

Official Chinese manufacturing data showing further improvement for the sector attracted only muted market reaction, with Chinese markets, along with those in Malaysia, the Philippines, South Korea, Taiwan and Thailand, closed for a public holiday.

The HSBC's China PMI data are due Wednesday. Tokyo stocks fell as the dollar weakened below Y80 for the first time since late February.

Japan's fiscal year-end earnings reporting season peaked Friday. U.S. crude futures rose to a fresh one-month high Tuesday after the ISM's purchasing managers index improved over the previous month and equities gained, signalling that the economy is continuing to recover.

COMMODITIES

Base metals closed mixed on the London Metal Exchange Tuesday after stronger-than-expected U.S. data gave the markets a lift in afternoon European trading.

At the PM kerb close, LME three-month copper was 0.5% higher on the day at $8,440 a metric ton, well off the session's low at $8,355/ton.

The Institute of Supply Management's manufacturing purchasing managers' index unexpectedly rose to 54.8 last month from 53.4 in March, its highest reading since June2011.

The figures contrasted with earlier PMI data from China, which fell short of expectations and dragged on base metal sentiment early in the session. U.S. crude futures rose to a fresh one-month high Tuesday after the Institute for Supply Management's purchasing managers index improved over the previous month and equities gained, signalling that the economy is continuing to recover.

Light, sweet crude for June delivery gained $1.29, or 1.2%, to settle at $106.16 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange rose 19 cents to $119.66 a barrel. Gold futures edged lower on the stronger-than-expected U.S. data, which helped the dollar shake off losses against other currencies. The most actively traded contract, for June delivery, settled down $1.80, or 0.1%, at $1,662.40 a troy ounce on the Comex division of the New York Mercantile Exchange.