World gains kindle Wall St rally

Some Christmas cheer has started to appear on Wall Street with US stock prices jumping ahead in the latest session after a four-day losing streak.

Earlier gains in Asia and Europe helped set the tone.

Parcel delivery leader FedEx has delivered strong quarterly profits, boosting the transport sector and the broader market more generally.

There has been corporate activity in the technology and real estate sectors also creating renewed interest.

Computer giant IBM is to buy software developer Micromuse for about $US865 million.

Goldman Sachs has lifted its profit forecasts for Apple Computer.

On the New York Stock Exchange, the Dow Jones industrial average has closed 28 points ahead at 10,834.

The high-tech Nasdaq composite index is up nine points at 2,232.

On the economic front, the final estimate of US economic growth has come in at an annualised 4.1 per cent for the September quarter, down from the earlier estimate of 4.3 per cent.

The British share market has made solid gains amid hopes of interest rate cuts next year.

London's FT-100 index has gained 39.5 points to close at 5,587.

The Australian share market yesterday surged into record territory, increasing in value by almost 1 per cent.

The energy and materials sectors led the way.

Rio Tinto shares were up $1.68 to $67.18.

And BHP Billiton shares gained 40 cents to $22.50 after it announced more oil had been found in the Gulf of Mexico.

Telstra shares climbed a further five cents to $3.93.

The All Ordinaries index rose 43 points to finish at 4,660.

On the Sydney Futures Exchange, the Share Price Index 200 contract closed up one point at 4,723.

The 10-year bond contract is down 1.5 points at 94.68 with the implied yield rising to 5.32 per cent.

The Australian dollar remains at its new lower levels.

At 7:15am AEDT, it was trading at about 73.38 US cents, down just a fraction on yesterday's local close.

On the cross-rates, it is at 0.6202 euros, 86.08 Japanese yen, 42.10 pence sterling and $NZ1.08.

The gold price is being quoted at about $US495.20 an ounce.

The spot price for West Texas crude oil is up 75 cents at $US58.56 a barrel.