U.S. STOCK MARKETS

U.S. stocks pushed higher for a third straight day this week, boosted by strong readings on the U.S. housing sector, though a sharp fall at International Business Machines weighed on blue chips.

The Dow Jones Industrial Average edged up two points, or less than 0.1%, to 13554, in late Wednesday trading.

The blue-chip index would have traded higher but for IBM, whose oversized presence on the price-weighted index slashed more than 80 points off the measure.

The Standard & Poor's 500-stock index tacked on seven points, or 0.5%, to 1462, while the technology-oriented Nasdaq Composite gained six points, or 0.2%, to 3107.

Intel and IBM both issued disappointing earnings reports after the closing bell on Tuesday. IBM slumped 5.1% after the technology company's third-quarter revenue fell short of analysts' estimates, due to the weakness in hardware sales.

Intel dropped 2.5% after missing forecasts for earnings and revenue, hurt by declining sales of personal computers. The semiconductor maker provided a somewhat downbeat outlook on revenue and gross margin percentages for the current quarter.

But beyond technology stocks, the other nine sectors of the S&P 500 saw broad-based gains. Alcoa, Johnson & Johnson, Walt Disney, Caterpillar and Procter & Gamble each advanced 1.5% or more, leading the Dow components.

The day's gains were propelled by signs of continued strength in the U.S. housing market. Construction of new homes surged more than expected in September, to the highest level in more than four years.

Separately, new building permits, an indication of future construction, rose above estimates in September. The strong data helped boost housing stocks.

PulteGroup jumped 5.6% and Hovnanian Enterprises soared 10% and are now up 177% and 179%, respectively, this year. D.R. Horton gained 4.3% and Lennar added 2.1%, while regional banks Hudson City Bancorp and M&T Bank were strong as well.

Home Depot, which benefits from the improvements in housing, rose 0.9% and led the Dow components for much of the day.

EUROPEAN STOCKS, BONDS MARKETS

Spain led European stock markets higher Wednesday, after Moody's Investors Service affirmed the country's credit rating at Baa3, one notch above junk status.

The Stoxx Europe 600 index rose 0.5% to close at 275.66, extending gains into a third straight session. Among notable gainers, BP PLC added 3% after news reports said the U.K. oil major is near a deal to sell its half interest in TNK-BP Ltd. to OAO Rosneft.

Dutch chip equipment manufacturer ASML Holding NV slumped 5.3% after it said it sees weak demand in memory chips and adjusted its second-half net sales guidance.

Both Spanish stocks and bonds rallied, with the IBEX 35 index jumping 2.4% to 8,128.20. The yield on 10-year government bonds fell 32 basis points to 5.45%, the lowest level since early April, according to electronic trading platform Tradeweb.

BBVA SA gained 5.6%, Banco Popular Espanol SA added 6.1% and Banco Santander SA picked up 3.2%. The news flow out of the U.K. also showed positive trends.

The Office for National Statistics said the unemployment rate dropped to a 15-month low of 7.9% in the three months ending in August. U.K. stocks were mostly higher with the FTSE 100 index up 0.7% at 5,910.91.

Royal Bank of Scotland Group PLC added 2.2% after it agreed with the U.K. Treasury to exit the government's Asset Protection Scheme.

Miners were also higher, tracking gains in most metals prices. Rio Tinto PLC added 4%, Anglo American PLC picked up 5.3% and BHP Billiton PLC rose 3.3%.

In France, food producer Danone SA slumped 3% after it said the situation in Europe affected sales in third quarter. Credit Agricole SA was down 2.9%. It said it would sell its Emporiki Greek banking arm to Alpha Bank AE for one euro ($1.30) and would take a EUR2 billion hit as a result of the sale.

The CAC 40 index, however, gained 0.8% to 3,527.50, with heavyweight oil group Total SA up 1.1%. In Germany, Lanxess AG added 2.8%, as Nomura picked the firm as one of its favorites in the European chemicals sector. The DAX 30 rose 0.3% to 7,394.55.

ASIA-PACIFIC STOCK MARKETS

Asian stock markets were higher Wednesday after Moody's reaffirmed its rating on Spanish debt, helping Australian and Hong Kong shares hit multi-month highs.

There was also some positive news from the U.S. where data showed confidence for home builders reached its highest level in October since 2006.

However poor technology results in the U.S. led Japanese semiconductor names to underperform. Advantest Corp. fell 2.2% and Tokyo Electron slipped 0.3%.

The dollar also weakened against the yen. Japan's Nikkei Stock Average was 1.2% higher at 8806.55, helped by Softbank Corp., which continued to recover from the sell-off late last week sparked by news that the company will acquire a 70% stake in Sprint Nextel. Softbank ended up 5.6%.

South Korea's Kospi Composite was 0.7% higher at 1955.15, as gains for the Korean won against the dollar helped boost airlines and builders: Korean Air Lines was up 3.2% and shipbuilder Hyundai Heavy Industries climbed 2.1%.

In China, the Shanghai Composite was up 0.3% at 2105.62 in cautious trading ahead of economic growth data Thursday. Hong Kong's Hang Seng Index rose 1% to 21416.64, its highest level since March.

The index climbed for the eleventh out of the last thirteen sessions with broad-base gains. Aluminum Corp. of China was one of the best performers, up 3.5%, benefiting from the risk-on sentiment. Sportswear brand Li Ning dropped 4.8% on news it is selling 25% of the company to sports talent firm Viva China Holdings.

COMMODITIES

Base metals on the London Metal Exchange closed higher, ticking up toward the session close as investors tracked improved sentiment toward the U.S. and Europe.

At the close of open-outcry trading, LME three-month copper was up $4 at $8,219 a metric ton. Crude futures ended Wednesday higher after rallying on tight distillate inventories.

Crude had traded in negative territory for much of the session, hitting an intraday low of $91.55 soon after the Department of Energy released its weekly petroleum inventory report.

The inventory report was broadly bearish and counteracted good news in other markets about the euro and the U.S. housing market. Nymex front-month oil futures for November delivery settled at $92.12 per barrel, up three cents, or less than 0.1%. Brent crude futures were trading at $113.05, down 95 cents.

Gold gained, taking its cues from moves in currency markets as investors cheered an affirmation of Spain's credit rating. The most-actively traded gold contract, for December delivery, rose $6.70, or 0.4%, to settle at $1,753 a troy ounce on the Comex division of the New York Mercantile Exchange. Compiled from MORRISON SECURITIES PTY. LTD.