U.S. investors geared up for the holiday shopping season by snapping up retail stocks, erasing almost all of Tuesday's sharp declines as the latest economic data painted an improving picture for U.S. growth. The Dow Jones Industrial Average jumped 139 points, or 1.3%, to 11175 in mid-day trading after falling 142 points Tuesday.

The Standard & Poor's 500 stock index gained 16 points to 1197 and the Nasdaq Composite added 46 points to 2541. U.S. markets will be closed Thursday, and open for just half a day on Friday. Trading on that Friday after Thanksgiving has generally been strong, rising 12 of the last 16 years, although last year's 1.5% decline was the worst for that day since 1987. Wednesday's gains were led by a surge in consumer discretionary and technology stocks, after the latest data showed consumers more upbeat on spending.

The Reuters/University of Michigan consumer sentiment index rose to 71.6 in November, up from 67.7 last month, topping expectations. Those numbers came after data showed the labor market is on the mend, as the number of U.S. workers filing new claims for jobless benefits fell by more than expected last week to the lowest level since July 2008. At the same time, Americans' personal income grew at a faster pace than they have for much of the year and consumer spending expanded.

But orders for durable goods marked the sharpest drop in almost two years, and new home sales fell for the fourth time in the last six months. Jewelry retailer Tiffany added to the enthusiasm over retail spending, jumping 5% after reporting a 27% increase in earnings. Coach added 3.8%, Polo Ralph Lauren gained 2.8% and Amazon.com jumped to an all-time high, soaring 5.4% ahead of the gift giving season.

European markets

European stock markets advanced Wednesday, recovering some of the week's heavy losses, as strong data from Germany helped offset continuing sovereign-debt fears. The Stoxx Europe 600 Index gained 1% to 266.29 after heavy selling in the previous two sessions. The German DAX 30 index rose 1.8% to 6,8023.80 after the Ifo Institute's closely watched business-climate index rose to its highest level since the nation was reunified.

European markets also extended their gains following U.S. data which showed rising consumer spending and a bigger than expected fall in unemployment claims. Most other European indexes were higher Wednesday. The U.K.'s FTSE 100 closed 1.4% higher at 5,657.10 and the French CAC 40 rose 0.6% to 3,747.61.

The Irish ISEQ index gained 0.5% as the government spelled out the details of its EUR15 billion austerity plan. The highly volatile shares of Bank of Ireland slumped 11% on reports that the Irish government will take a majority stake in the lender as part of a bailout package for the country. Among other countries with lingering sovereign-debt worries, Portugal's PSI 20 index and Spain's IBEX 35 each rose 0.5%.

Asian markets

Asian markets ended mixed Wednesday, with the market in Seoul finishing lower but staging a recovery from the earlier selloff, on hopes that tensions on the Korean Peninsula would be short lived. South Korea's Kospi Composite ended 0.2% lower after losing as much as 2.4%. Japan's Nikkei Stock Average closed down 0.8%, China's Shanghai Composite Index closed up 1.1%, Hong Kong's Hang Seng Index rose 0.6% and Taiwan's main index lost 0.4%.

Sentiment took a hit initially as many Asian investors got their first chance to react to Tuesday's brazen North Korean artillery attack on a South Korean island, but buying quickly picked up on receding fears of a rapid escalation in the conflict. In Seoul, some big cap stocks reversed early losses, while foreigners also bought into beaten down stocks, suggesting that offshore investors were discounting geopolitical risks.

Foreign investors were net buyers in the Korean bourse, picking up KRW18.67 billion worth of local shares, easing concerns of aggressive fund repatriation following the exchange of fire between the Koreas. Samsung Electronics rose 1.3%, Hynix Semiconductor gained 1.6% and LG Electronics added 1.0%. After a holiday Tuesday, the Japanese market opened sharply lower on the Korea news but trimmed its losses by the close.

The market was also weighed by exporters as the euro earlier fell sharply on continuing concerns Ireland's debt problems may spill over to other euro-zone countries. Among exporters, Sony closed down 2.1%, Nikon lost 2.9% and Nissan dropped 2.1%. Banks led gains in China on bargain buying, while Industrial & Commercial Bank of China's successful cash call lifted sentiment. China Merchants Bank closed up 1.2% and Industrial Bank rose 2.0%.

Base metals

Copper closed higher on the London Metal Exchange for the first time in four sessions Wednesday as base metals rebounded on robust dip buying and strong fundamentals. The red metal closed at $8,250 a metric ton, up $110, or 1.4%, on Tuesday's PM kerb close. Investors drove the markets higher as they took advantage of lower metal prices following a broad selloff across the commodity markets last week.

A brief strengthening in the euro against the dollar during afternoon trade in Europe also helped boost the metals. The rebound sent nickel to its highest level in more than a week, with the metal reaching an intraday high of $22,549/ton. It slipped back marginally to close up $900, or 4.2%, at $22,500/ton. Tin was also up strongly, closing $400, or 1.7%, higher at $24,250/ton.

Crude futures extended early gains Wednesday on improving economic data and as a modest rise in weekly U.S. oil inventories calmed worries about a much larger increase. Light, sweet crude for January delivery settled $2.61 higher at $83.86 a barrel on the New York Mercantile Exchange. U.S. crude oil inventories rose by one million barrels in the week ended Nov. 19, according to a report from the Department of Energy. The report followed similar data released late Tuesday from the American Petroleum Institute, an industry trade group, that said supplies rose by 5.2 million barrels.

Comex gold futures ended lower on modest dollar strength and easing worries over North and South Korean tensions. The most actively traded contract, for December delivery, settled down 0.3%, or $4.60, at $1,373.00 per troy ounce on the Comex division of the New York Mercantile Exchange.

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