Stocks on Wall Street rose sharply on Monday in a late rally on signs of easing credit and the growing likelihood of a second stimulus package in the United States.
The Dow Jones industrial average jumped 413.21 points, or 4.67%, to 9,265.43.
Standard & Poor's 500 Index climbed 44.85 points, or 4.77%, to 985.40. The Nasdaq Composite Index rose 58.74 points, or 3.43%, at 1,770.03.
However, trading volume on the New York Stock Exchange was the lowest since 26 September. About 1.23 billion shares changed hands On the NYSE - far below last year's estimated daily average of roughly 1.90 billion.
About 2.06 billion shares were traded on the Nasdaq - also below last year's daily average of 2.17 billion.
The rise came after Federal Reserve Chairman Ben Bernanke told Congress another wave of government spending may be needed to boost the struggling economy.
It was the first time Dr Bernanke had explicitly endorsed a second stimulus package.
European stocks
European stocks also rose. The FTSEurofirst 300 index of top European shares ended up 3.8% at 928.29 points.
The index gained 4.2% on Friday, but is down more than 38% to date this year in a credit crisis that has brought the global economy to the brink of recession.
In Britain, the FTSE 100 index rose 5.4%, Germany's DAX rose 1.1% and France's CAC added 3.6%.
The three-month Libor rate fell more than one-third of a percentage point - its biggest one-day drop in nine months. This signalled that banks may have the confidence to lend to each other again.
Governments around the world have pledged more than $US3 trillion to guarantee bank deposits and interbank lending.
European Central Bank President Jean-Claude Trichet has also pledged to do whatever it takes to restore confidence in financial markets.
He told RTL radio in France on Sunday the ECB was working closely with the US Federal Reserve to solve the financial crisis.
NZ & Australia
The New Zealand share market has reversed the sentiment of previous weeks.
The NZX 50 index closed up 81 points on Monday, or 2.9%, to 2889 on turnover of $71 million.
At 8.20am on Tuesday, the New Zealand dollar was buying US62.35 cents, 88.89 Australian cents, 36.36 pence, 63.41 yen and 0.4677 euro. The Trade Weighted Index was 61.78.
The Australian share market closed almost 4% higher. The S&P/ASX200 index was up 171.5 points, or 4.32%, to 4142.3, while the All Ordinaries added 157.9 points, or 3.9%, to 4098.7.
On the Sydney Futures Exchange, the December share price index contract was up 120 points to 4171 on a volume of 32,859 contracts.
The rises were their biggest since Monday last week and their highest close since last Wednesday.
Market turnover reached 1.31 billion, worth $A4.29 billion.
