Stocks in the United States rebounded on Tuesday, rising more than 2% on another sharp slide in oil prices and the latest write-down by Merrill Lynch.
Brokerage Merrill Lynch jumped nearly 8% after announcing late on Monday that it will write down $US5.7 billion and raise $US8.5 billion by selling new stock.
Financial shares rose broadly.
US crude prices dropped more than 2%. Crude oil for September delivery settled down $US2.54, or 2.04%, at $US122.19 a barrel - about $US25 below a record price of $US147.27 on 11 July.
US Steel Corp posted a record second-quarter profit, sending its stock up 14.1% to $US165.76.
The Dow Jones industrial average rose 266.48 points, or 2.39%, at 11,397.56. Standard & Poor's 500 Index gained 28.82 points, or 2.33%, at 1,263.19. The Nasdaq Composite Index rose 55.40 points, or 2.45%, at 2,319.62.
Trading volume was light on the New York Stock Exchange, with about 1.40 billion shares changing hands. But volume was high on the Nasdaq, where about 2.31 billion shares were traded.
European shares up
European shares also ended higher on Tuesday after a three-day losing streak.
The FTSEurofirst 300 index of top European shares closed 0.3% higher at 1,162.57 points.
Earlier, a higher-than-expected reading on a consumer sentiment index in the United States helped bring about a turnaround for European shares.
The consumer index came in at 51.9 for July - the first rise since December.
However, banks were down after an unexpected $US5.7 billion writedown by Merrill Lynch late on Monday.
In other markets: the DAX index ended at 6,398.8 points, up 47.65 or 0.75%. The CAC-40 index closed at 4,320.49 points, down 3.96 or 0.09%. The Swiss market index closed at 6,993.3 points, up 24.37 or 0.35%.
In Britain, the FTSE 100 index was up 6.6 points, or 0.1%, at 5,319.2. The index is down 17.6% for the year to date.
NZ market down
The NZX 50 index finished on Tuesday down 21 points to 3236 on turnover of $84 million.
ANZ Bank was down 35 cents to $20.15 after cutting its full-year earnings by a quarter on higher costs to cover bad debts.
Telecom was down 2c to $3.59, Contact Energy was up 3c to $8.20 and Fletcher Building was down 24c to $6.25 after building consents fell to their lowest monthly total in seven years.
Auckland International Airport Ltd was up 2c to $1.86.
Methven was unchanged at $1.60, while Postie Plus was down 1c to 39c after shareholders agreed to sell its Arbuckle chain to Kathmandu founder and principal Postie Plus shareholder Jan Cameron for $4 million.
The dollar was buying 74.50 US cents, 77.75 Australian cents, 37.30 pence, 79.99 yen and 0.4730 euro. The Trade Weighted Index was 66.39.
The Australian share market fell 1.5%. The S&P/ASX200 index was down 74.7 points, or 1.52%, to 4847.4 while the All Ordinaries dipped 66.6 points, or 1.33%, to 4923.3.
The September share price index futures contract fell 106 points to 4831 on a volume of 21,433 contracts.