US stocks surge as Alcoa results best expectations

NEW YORK (AFP) - Wall Street stocks followed European equity markets higher Tuesday, surging in early trade after results from Alcoa kicked off quarterly earnings season.

About 30 minutes into trade, the Dow Jones Industrial Average stood at 17,913.28, up 272.44 points (1.54 per cent).

The broad-based S&P 500 jumped 27.56 (1.36 per cent) to 2,055.82, while the tech-rich Nasdaq Composite Index gained 81.05 (1.74 per cent) at 4,745.76.

Equity markets in France and Germany were both up more than 1.5 per cent on speculation about monetary stimulus from the European Central Bank.

Alcoa slipped 0.6 percent after reporting earnings that translated into 33 cents per share, more than the US25 cents projected by analysts. The aluminum maker's results mark the unofficial start of quarterly earnings season.

"A good start to fourth-quarter reporting season is helping to offset further weakness in oil," said an investor note from Wells Fargo Advisors.

MetLife advanced 0.8 per cent as it announced it will challenge in court a US regulatory designation as a "systemically important financial institution," a classification that subjects it to tougher scrutiny.

Homebuilder KB Home added 1.8 percent after fourth-quarter revenues jumped 15 percent to US$2.4 billion. Profit surged to US$852.8 million on an US$824.2 million tax benefit.

Apple rose 2.6 per cent following an upgrade by Credit Suisse, while Best Buy rose 1.7 per cent on an upgrade from Goldman Sachs.

Bond prices fell. The yield on the 10-year US Treasury rose to 1.92 percent from 1.91 percent Monday, while the 30-year advanced to 2.52 per cent from 2.50 per cent. Bond prices and yields move inversely.