U.S. STOCK MARKETS

Investors pushed stocks sharply higher Wednesday, erasing all of July's losses, as investors reacted to strong corporate earnings and continued hopes for central-bank intervention.

The Dow Jones Industrial Average rose 103.16 points, or 0.81%, to 12908.70, while the Standard & Poor's 500-stock index tacked on 9.11 points, or 0.67%, to 1372.78--bringing that index to within a hair of a fresh two-month high.

The Nasdaq Composite outpaced the other two measures as technology stocks soared, adding 32.56 points, or 1.1%, to 2942.60. With Wednesday's gains, all three major indexes are now in positive territory for July.

Intel led the gains among Dow components, rising 3.3% after the blue-chip semiconductor maker topped earnings expectations, though it also lowered its full-year revenue-growth outlook, citing a more challenging macroeconomic environment.

Positive earnings news from VMWare and EMC also supported the sector. The top five gainers on the Dow were all tech names, led by Intel, Cisco Systems, Microsoft, International Business Machines and Hewlett-Packard. Each rose more than 2%.

Industrial stocks were also strong, after Honeywell International reported second-quarter earnings that were above estimates and raised the lower end of the range of its full-year earnings outlook.

Honeywell rose 6.7% while fellow industrial companies United Technologies and Boeing also increased. Financial and consumer-staples stocks pulled on the downside.

Bank of America dragged on the Dow, falling 4.9% after it reported second-quarter earnings that exceeded forecasts but were driven by lower tax rates and lower credit costs.

The broad-market gains were supported by U.S. economic data, which showed home construction rising 6.9% last month from May to an annual rate of 760,000, better than expectations for a 5.2% monthly gain and marking the highest level in nearly four years.

However, building permits for June fell 3.7% to an annualized level of 755,000, lower than Wall Street expectations. Separately, Federal Reserve Chairman Ben Bernanke told the U.S. House Financial Services Committee it was "certainly possible" the central bank could take new steps to support the economic recovery if the jobs market doesn't show improvement.

The release of the Fed's so-called "beige book" of economic conditions around the country reported weaker manufacturing and consumer spending in June, with modest to moderate growth over the past month.

In corporate news, VMware climbed 12% after the virtualization-software company announced preliminary revenue and adjusted operating margins that were above earlier forecasts. EMC rose 9.4% after backing its full-year earnings and revenue outlook while reporting quarterly earnings slightly below estimates and revenue marginally above estimates.

EUROPEAN STOCK MARKETS, BONDS

Strong earnings from Credit Suisse Group AG and Nordea Bank AB enabled European stock markets to move into positive territory Wednesday, while Wall Street strength gave equities a late-session boost.

The Stoxx Europe 600 index jumped 1.1% to 258.93, closing at its highest level since April 27. Credit Suisse rose 4.5% as the bank reported a 3.6% increase in net profit for the second quarter and said it aims to boost capital by 15.3 billion Swiss francs ($15.6 billion) before the end of the year. Sweden's Nordea Bank advanced 2.4% after reporting forecast-beating second-quarter results.

Stocks extended gains in afternoon action after the U.S. market slowly climbed into positive territory. In his second day of testimony, U.S. Federal Reserve Chairman Ben Bernanke reiterated his comments about the Fed's commitment to ease monetary policy if needed, but again didn't detail any plans for further quantitative easing.

Ahead of the open on Wall Street, data showed housing starts in the U.S. in June rose at the fastest pace since autumn 2008, beating analysts' expectations.

Better-than-expected unemployment data from the U.K. also helped lift markets. In addition, minutes from the Bank of England's July policy meeting showed seven of nine votes in favor of an increase in asset purchases, along with a unanimous vote to leave the key lending rate unchanged at 0.5%. Stocks climbed in London, with the FTSE 100 index rallying 1% to 5,685.77.

BHP Billiton PLC rose 2% after reporting a 12th consecutive annual production record from its iron-ore operations in Western Australia. HSBC Holdings PLC slipped 0.3%, as a key executive said Tuesday he would step down in response to a continuing U.S. government investigation into money laundering.

In Spain, some banks' shares fell after Societe Generale cut its earnings estimates for the country's banking sector by 12% on average and said it expects earnings to drop by 47% quarter-on-quarter. Banco Popular Espanol SA dropped 1.7% and Banco de Sabadell SA fell 2.3%. The IBEX 35 index gained 0.5% to 6,591.20.

Societe Generale further estimated Italian banks would see earnings slashed by 75% for the quarter. Shares of Banca Monte dei Paschi di Siena SpA lost 2.8%, weighing on the FTSE MIB index which underperformed most country-specific indexes, rising 0.4% to 13,594.39.

In France, oil group Total SA added 1.9%, helping lift the CAC 40 index by 1.8% to 3,235.40. Among German stocks, pharmaceutical firm Merck KGaA rose 2.9%. The DAX 30 index jumped 1.6% to 6,684.42.

ASIA-PACIFIC STOCK MARKETS
Asian stocks fell Wednesday as a gloomy outlook by U.S. Federal Reserve Chairman Ben Bernanke trumped hopes for further monetary stimulus.

In China, the state-run China Securities Journal published a front-page commentary saying that China should shift its monetary stance towards easing to stop the slowdown in economic growth.

Some observers are expecting an imminent reduction in China's reserve requirement ratio, the minimum amount of capital that banks have to keep in reserves.

Alvin Cheung, associate director at Prudential Brokerage, said that investors are expecting a cut perhaps as soon as Friday. Hong Kong's Hang Seng Index dropped 1.1% to 19239.88, dragged down by its single-largest constituent, HSBC. The company fell 2.1% after the top executive in charge of the bank's anti-money laundering programs stepped down in the wake of a U.S. Senate investigation into risky practices.

A poor performance by Chinese property developers also added pressure to the Hang Seng Index, as signs of recovery in the housing market were taken as an indication that Beijing will maintain its tough policy towards the sector.

China Resources Land fell 5.9% and China Overseas Land & Investment dropped 4% after a survey showed that average housing prices in 70 cities were flat in June from May.

Japan's Nikkei Average ended 0.3% lower at 8726.74, despite spending much of the session in positive territory. The market eventually turned lower as a result of a late rise in the yen that weakened gains in exporters and selling in power companies.

Japanese metals firms were also under pressure, with Nippon Light Metal Co. down 3.5% and Pacific Metals Co. off 2.4%. In Hong Kong, Aluminium Corp. of China Ltd. fell 1.6%. J.P. Morgan cut its stance on iron ore prices, downgrading 2012 estimates by 7% and 2013 estimates by 10%. South Korea's Kospi was down 1.5% at 1794.91, while the Shanghai Composite gained 0.4% to 2169.10.

COMMODITIES
Base metals closed mostly higher on the London Metal Exchange Wednesday, boosted late in the session by better-than-expected U.S. housing data.

At the close, LME three-month copper was 0.6% higher at $7,635 a metric ton. Aluminum was up 0.3% on the day at $1,909/ton. Oil prices rose again Wednesday, blowing past a mediocre oil inventory report to notch a higher closing price for the sixth straight day.

Light, sweet crude for August delivery settled at $89.87 a barrel on the New York Mercantile Exchange, up 65 cents or 0.7%. Brent crude on ICE futures exchange was trading at $105.18 a barrel, up $1.18. Wednesday's jump came after the U.S. Energy Information Administration released a weekly inventory report showing U.S. crude stocks fell by 800,000 barrels, less than the 1.1 million barrels drop forecast by analysts.

Also on the bearish side, the build in distillate stocks of 2.6 million barrels was above the 1.3 million that had been projected. But analysts had projected a build of gasoline of 800,000 barrels, and the report showed a decline of 1.8 million barrels.

Gold futures retreated amid a stronger dollar and after Federal Reserve Chairman Ben Bernanke again didn't commit to fresh liquidity measures in his testimony to Congress. The most actively traded contract, for August delivery, fell $18.70, or 1.2%, to settle at $1,570.80 a troy ounce on the Comex division of the New York Mercantile Exchange. From MORRISON SECURITIES PTY. LTD