US markets end 1.5% up on AT&T & T-Mobile deal

The US markets rallied for the third successive day as the Dow climbed back above the 12000, buoyed by a major telecommunications deal and an upmove in energy stocks. There were signs that Japan's nuclear crisis was stabilizing pushed sentiment up further.

"We had a correction. I think the trend is upwards. It's a very attractive environment to invest in stocks. Companies are flushed with cash. They can use that to buy back stocks, increase dividends or go and buy other companies," Philip Tasho, CEO & CIO, TAMRO Capital said.

On the economic front, existing home sales suffered a setback as the monthly report showed a decline of nearly 10% to a lower-than-expected rate of 4.88 million.

The Dow Jones Industrial Average closed up 178.01 points or 1.5% at 12,036.53. The NASDAQ Composite ended at 2,692.09, with gaining 48.42 points or 1.83% and the S&P 500 Index jumped 19.18 points or 1.50%, to close at 1,298.38.

European markets extended their gains led by telecom stocks, which were boosted by Deutsche Telekom's sell-off of its T-Mobile US operation to AT&T. Investor sentiment turned positive on speculations of a pick-up in merger and acquisition activity. France's CAC, Germany's DAX and Britain's FTSE were up 1-2.5% at close.

The dollar fell to its lowest level in 15 months against a basket of currencies led by a recovery in risk appetite and a surge in demand for the euro. Amid anticipation that the ECB was likely to hike its interest rates next month, the euro surged to its highest level in five months.

Crude prices climbed up more than a percent as UN mandated air strikes in Libya continued and growing unrest in West Asia sparked worries about supply disruptions. However, they came off yesterday's highs. Nymex traded around the USD 102 per barrel mark and Brent around USD 114 a barrel. All eyes are on the weekly petroleum inventory data expected later in the week.

Coalition forces continue to launch airstrikes on pro-Gaddafi forces in Libya. This is the fourth day of the military offensive in the African nation. More explosions and anti aircraft firing could be heard in Tripoli. The UN Security Council turned down Libya's request for a special meeting to discuss the strikes- following the imposition of a no-fly zone.

Copper traded more than a percent weaker as weaker-than-expected US existing home sales data and softer refined copper imports to China raised concerns about the sustainability of the global economic recovery.