Wall Street climbs to fresh highs overnight

Wall Street climbed to fresh highs as investors bet that the pace of the economic recovery, both at home and abroad, will sustain corporate profit growth.

The initial catalyst for today's rally was another piece of good news from China. Reports showed that the nation's imports increased more than expected last month, rising 14.1 per cent, while export growth eased to 10 per cent from a year earlier.

It is a welcome sign of China's increased appetite for overseas products and services, key to helping offset continuing weakness in Europe and Japan.

In afternoon trading in New York, the Dow Jones Industrial Average rose 0.98 per cent, the Standard & Poor's 500 Index climbed 1.15 per cent, while the Nasdaq Composite Index advanced 1.75 per cent.

Earlier in the session, the Dow hit a record 14,826.66, while the S&P 500 touched a record 1,588.85.

"The path of least resistance for the market remains higher, and despite some mixed economic data, investors are concluding that stocks remain a better place to be than risk-free assets," Jim McDonald, chief investment strategist at Chicago-based Northern Trust Global Investments, told Reuters.

Among the mixed US data was last week's unexpectedly poor March payrolls report.

Still, American central bankers remain optimistic about the recovery. The Federal Reserve's policy makers noted "moderate economic growth had resumed following a pause late last year," according to the FOMC's March minutes released today.

Indeed, a continued improvement in the jobs market might signal the easing of the end of the Fed's monthly asset purchases, currently set at US$85 billion.

"If the outlook for labour market conditions improved as anticipated, it would probably be appropriate to slow purchases later in the year and to stop them by year-end," according to the minutes reflecting the opinion of "several" policy makers.

US Treasuries weakened as a result, sending the yield on the current 10-year note four basis points higher to 1.79 per cent and curbing demand for today's auction of the same maturity.

In a speech in New York, IMF chief Christine Lagarde urged global central bankers to keep their feet on easy money policies. "This crisis has been long, bitter, and hard. The priority now is to take advantage of any financial breathing space, and put it to good use. This is such a moment. We cannot afford to let up."

In Europe, the Stoxx 600 Index added 1.8 per cent from the previous close. Benchmark stock indexes in London, Paris and Frankfurt also rallied, rising 1.2 per cent, 2 per cent and 2.3 per cent respectively.

The FTSE 100 has risen 2.2 per cent in the last three days, its best three-day performance since January.