World shares fuelled overnight by oil price slide

Equities on Wall Street rose as data underpinned the view that strength in the world's largest economy was gathering steam, and as oil prices dropped.

In mid-day trading, the Dow Jones Industrial Average climbed 1.52 per cent, the Standard & Poor's 500 Index advanced 1.56 per cent and the Nasdaq Composite Index jumped 1.89 per cent.

In Europe, the benchmark Stoxx 600 Index gained 0.3 per cent, rising for the first session in three.

"It is showing you that there is enough cash on the sidelines that has missed the boat and wants in," Scott Marcouiller, chief technical market strategist at Wells Fargo Advisors in St. Louis, told Reuters.

Today's economic data suggested optimism about the outlook for growth was justified. US initial jobless claims fell to a 2-1/2 year low last week, while the Institute for Supply Management's non-manufacturing index surpassed expectations for February.

Investors will closely eye tomorrow's Labor Department February jobs data.

US Treasuries declined, pushing the yield on the 10-year note nine basis points higher to 3.56 per cent.

Oil fell, reversing some of its recent steep advance, as Venezuela said its proposal for a negotiated solution to the Libyan conflict was accepted by the North African government and the Arab League said the plan was being considered.

April US crude futures dropped 0.8 per cent to US$101.39 per barrel.

Brent crude slid 1.4 per cent to US$114.67.

Meanwhile, the euro climbed against the greenback after European Central Bank President Jean-Claude Trichet bolstered expectations that interest rates in the euro zone would rise soon.

The euro was up 0.5 per cent at US$1.3933. Against the yen, the euro traded 1.1 per cent higher at 114.78.

Trichet said the ECB would exercise "strong vigilance" over rising inflation, a comment that in the past signalled an interest rate increase was only a month away.

"It is crystal clear, from both the statement as well as Trichet's remarks afterwards, that the ECB is prepared to raise rates as early as next meeting," Michael Woolfolk, senior currency strategist at BNY Mellon in New York, told Reuters.

The US dollar rose 0.5 per cent to 82.31 yen.

Gold dropped, falling for the first day in five. Spot gold last was 1.4 per cent weaker at US$1,413.85.

"Obviously, you have the European talk about higher interest rates down the road and a stalling crude rally, which are weighing on the market now," Frank McGhee, head precious metals trader of Integrated Brokerage Services, told Reuters. "You have everything that at least set us up for a day of profit taking."