U.S. STOCK MARKETS

The Standard & Poor's 500-stock index topped 1400 for the first time in three months after a Federal Reserve official called for additional central bank stimulus. The Dow Jones Industrial Average climbed 51.09 points, or 0.4%, to 13168.60, rising for a third consecutive session.

The S&P 500 rose 7.12 points, or 0.5%, to 1401.35. Energy and materials shares led the advance, while defensive sectors such as telecommunications and utilities lagged behind.

The Nasdaq Composite Index advanced 25.95 points, or 0.9%, to 3015.86, finishing above 3000 for the first time since May 3. Federal Reserve Bank of Boston President Eric Rosengren said the Fed should launch an aggressive open-ended bond buying program to boost the economy until unemployment begins falling again.

Mr. Rosengren is a nonvoting member of the Fed's policy-setting committee. On the economic front, U.S. consumer credit expanded at the slowest pace in eight months in June, according to a Federal Reserve report. The increase was less than economists expected as Americans cut revolving credit, which includes credit-card debt.

The Labor Department reported the number of job openings at the end of June ticked up from a month earlier to 3.8 million, while the hiring rate was essentially unchanged.

In the corporate arena, shares of Fossil surged 31%, leading the S&P 500, as the fashion-accessories retailer reported an unexpected increase in second-quarter profit.

Of the 425 companies in the S&P 500 that had reported earnings for the latest quarter as of Tuesday morning, 64% have topped analysts' expectations, slightly higher than the 10-year average of 62%, according to S&P Capital IQ. Chesapeake Energy, the country's second-largest natural-gas producer, jumped 9.4% on higher-than-expected revenue and asset-sale plans.

EUROPEAN STOCK MARKETS

European stocks ended higher in thin, summer trading Tuesday, with oil stocks gaining ground as the broader market brushed aside a clutch of negative economic data and as a sharp pullback for Standard Chartered PLC didn't spark selling in the wider financial sector.

The Stoxx Europe 600 index rose 0.7% to close at 268.80. Standard Chartered's shares shed more than 16%, tracking heavy losses in Asia after a New York regulator accused the bank of colluding with Iran to hide at least $250 billion in transactions.

The Asia-focused bank disputed the allegations. Meanwhile, gains for some peripheral regional indexes stood out. The Greece ASE Composite index rose 1.9% to 620.46, with National Bank of Greece SA up 5.4%. Betting group OPAP SA also rose, up 3.3%. Portugal's PSI 20 index gained 2.8% to 4,835.43, driven partly by gains for energy-related companies.

Galp Energia SGPS SA rose 2.6% and EDP-Energias de Portugal SA gained 3.3%. Banks also rose, with Banco Espirito Santo SA adding 5.5%. In Madrid, the IBEX 35 index rose 2.2% to 7,211.10, with Banco Santander SA up 3.1%. Economic data jarred the market earlier.

U.K. manufacturing output saw a 2.9% drop in June, the biggest fall since November 2008, due in part to an extra holiday for Queen Elizabeth's Diamond Jubilee. Italy reported a 0.7% decline in economic growth for the three months through June, after a 0.8% contraction in the prior quarter.

Topping it off, German factory orders for June fell a steeper than expected 1.7%. London's FTSE 100 shook off Standard Chartered's troubles to settle 0.6% higher at 5,841.24. Gains for energy stocks provided support, with BP PLC up 2.9% and BG Group PLC adding 3.2%.

The French CAC 40 index had a volatile day, but rebounded to close 1.5% higher at 3,453.28. Total SA rose more than 2%, alongside other energy stocks. Banks shed earlier losses to support the index, with Credit Agricole SA rallying 6.6% and Societe Generale SA gaining 2.5%.

German utilities E.On AG and RWE AG rose 2% and 1.5%, respectively, helping underpin gains for the German DAX 30 index. The DAX ended the day with a 0.7% gain at 6,967.95. Chemicals group BASF SE rose 1.4%, but elsewhere in the sector, shares of Lanxess AG fell 2.5% as its profit forecast for the year disappointed some analysts.

ASIA-PACIFIC STOCK MARKETS

Asian markets edged higher Tuesday as the Reserve Bank of Australia left interest rates unchanged and investors looked ahead to Chinese economic data later in the week, while Standard Chartered fell 14.9% in Hong Kong after it was accused by the U.S. regulator of dealings with Iran.

Japan's Nikkei finished up 0.9% to 8803.31, as utilities and steel companies rallied. The market's performance was helped by the yen which weakened slightly as the session progressed. A computer system failure prompted the Tokyo Stock Exchange to earlier suspend the trading of all derivatives instruments--including Topix-linked futures and long-term government bond futures.

Trading resumed later and analysts said it didn't have an impact on the cash stock market. Hong Kong's Hang Seng Index gained 0.4% to 20,072.55, reclaiming the 20,000 point mark with retail stocks leading the gains, with Esprit rocketing 28% on news that the company will appoint a new CEO.

The Shanghai Composite was just 0.1% higher at 2157.62 and South Korea's Kospi was up less than 0.1% to 1886.80. In company news, Standard Chartered skidded 14.9% in Hong Kong, on news that New York's financial regulator accused a unit of the bank of scheming with the Iranian government to hide more than $250 billion of illegal transactions for more than a decade.

Also in Hong Kong, Prada gained 6.7% after the luxury goods company announced that its first half sales jumped 37% on the year, boosted by strong demand in the Asia-Pacific reason.

In Taiwan, phonemaker HTC dropped by the 7% daily limit after posting a 51% on-year decline in July revenue. Nippon Telegraph & Telephone rose 1.4% in Tokyo after the company announced that it expects group net profit to be Y575 billion for the year ending March, much in line with expectations.

ASX REVIEW from IG MARKETS

Risk assets extended their gains in a relatively quiet session on the headline front. Sentiment was also somewhat supported by dovish comments from Boston Fed President Eric Rosengren, who called for 'a much more accommodative policy'. Fed Chairman Ben Bernanke, in his prepared statement, did not discuss monetary policy. However, he noted that the US economy is still in a 'fragile recovery' phase, but is 'well placed' for the future. The near-term outlook for risk assets has improved following stronger-than-expected US July payrolls and hints from Spain's Prime Minister Rajoy that he's willing, at last, to consider applying for full assistance from the EU. In the risk currencies space, the euro remained resilient with EUR/USD trading above 1.24 despite weak economic data in Germany. AUD/USD retreated from its highs in the Asian session and was trading at around 1.055 at the end of the US session.

Ahead of the open, we are calling the Aussie market up 0.5% at 4312. The last time the ASX 200 was above 4300 was on 14 May. The market gains have been capped at around these levels on several occasions in the past and we feel a fairly significant catalyst is needed to get through this region. On the economic front, we have home loans data due out at 11.30am. Perhaps tomorrow is a bigger day on the economic calendar with jobs numbers locally, and a swathe of data from China. Elsewhere in the region, Japan's Nikkei will be in focus heading into the BoJ's two-day meeting. However, the BoJ is widely expected to keep its policy effectively unchanged. The yen's weakness over the past few sessions had been on the back of fears of further intervention. In the absence of intervention, USD/JPY could trade heavy in coming sessions.

On a stock level, we expect a firmer start for BHP Billiton, with its ADR pointing to a 0.8% rise to $32.42. On the earnings front, today we have Computershare, Stockland and Rio Tinto to look out for. Bradken might see some re-rating from the brokers following its results and big rally from yesterday. Westfield has been raised to Buy (from Hold) by Deutsche Bank with a price target of $10.70.

COMMODITIES

Base metals closed higher on the London Metal Exchange Tuesday, rising in line with buoyant wider markets and a relatively strong euro/dollar exchange rate, while fundamental news continued to prop up thinly traded tin.

At the close, LME three-month copper had climbed 1.1% to $7,580 a metric ton, while nickel lagged the complex, down 0.3% at $15,750/ton.

Crude-oil futures rose to a 12-week high Tuesday, rallying on positive market sentiment and concerns about short-term supply. Light, sweet crude for September delivery rose $1.47, or 1.6%, to $93.67 a barrel on the New York Mercantile Exchange, the highest settlement price since May 15.

Brent crude on ICE Futures Europe rose $2.45, or 2.2%, to settle at $112 a barrel. Gold prices settled lower in quiet trading, as the euro gave back some of its early-morning gains. The most actively traded contract, for December delivery, fell $3.40, or 0.2%, to $1,612.80 a troy ounce on the Comex division of the New York Mercantile Exchange. Compiled from MORRISON SECURITIES PTY. LTD. and IG MARKETS