* Global shares hit highest level since Sept
* Wall St rallies on 'fiscal cliff' hopes; S&P posts best
2-day run in a month
* Euro hits fresh 7-1/2-month high vs U.S. dollar
By Angela Moon
NEW YORK, Dec 18 Global stocks advanced to their
highest levels since September on Tuesday on signs of compromise
in U.S. talks to stop automatic tax hikes and spending cuts that
could hurt the economy next year.
With confidence rising that lawmakers would avert the
"fiscal cliff," investors shifted funds to stocks and the euro
and pulled away from assets traditionally viewed as safe harbors
like bonds, gold and the U.S. dollar. The euro hit a 7-1/2 month
high against the greenback while gold fell almost 2 percent to
its lowest since August.
Wall Street rallied on strong volume, capping off the S&P
500's best two-day run in a month, on confidence that a deal
would be struck in Washington to avoid painful spending cuts and
Banking, energy and technology - sectors that would benefit
during economic expansion - led gains as investors were
confident that lawmakers will come to an agreement to avoid the
The PHLX oil services sector index jumped 3.1
percent, with eight of its 15 components up 3 percent or more.
"The view is that the economy is getting better, and that is
always good for energy demand," said Shawn Hackett, president at
Hackett Financial Advisors in Boynton Beach, Florida.
Hackett said the United States would avoid "whatever the
'cliff' means" for the economy, allowing investors to focus on
President Barack Obama's most recent offer to Republicans in
the ongoing budget talks makes concessions on taxes and social
programs spending. House Speaker John Boehner said the offer is
"not there yet," though he remains hopeful about an agreement.
Senate Democrats, however, have expressed concern about cuts to
For a second day, banks led the rally on Wall Street.
Goldman Sachs Group was up 3.5 percent and Morgan Stanley
gained 3.2 percent after Jefferies Group reported
a higher-than-expected adjusted quarterly profit.
Jefferies was up 3 percent to $18.80. The S&P
500 Financial Index climbed 1.5 percent.
The Dow Jones industrial average closed up 115.57
points, or 0.87 percent, at 13,350.96. The Standard & Poor's 500
Index was up 16.43 points, or 1.15 percent, at 1,446.79.
The Nasdaq Composite Index was up 43.93 points, or 1.46
percent, at 3,054.53.
European shares ended higher, with a key index closing just
a few points below its 2012 high.
The euro rose against the dollar for a seventh straight
session on Tuesday, hitting its highest level in more than seven
The euro was last up 0.5 percent at $1.3224 after
hitting a high of $1.3238, its strongest level since early May.
The dollar index fell to a two-month trough of 79.260.
The index was last quoted at 79.342, down 0.3 percent.
Oil prices rose. Front-month Brent crude oil prices
rose $1.20 to settle at $108.84 a barrel, briefly topping the
14-day moving average of $108.87 a barrel.
January U.S. crude oil futures gained 73 cents to
settle at $87.93 a barrel, breaking above the 50-day moving
average of $87.64 a barrel after testing that level during
Among other assets, gold, seen as a safe haven, tumbled,
with spot gold down 1.9 percent at $1,666.90 an ounce.
U.S. Treasury yields rose to their highest since October.
The benchmark 10-year U.S. Treasury note was down
15/32, with the yield at 1.824 percent.