Overnight Markets: Wall Street rises after Fed minutes indicate further liquidity

US stocks hit fresh five-month highs on Tuesday as Federal Reserve policy makers indicated they are ready to pump more cash into the economy to protect the recovery.

The Dow Jones industrial average rose 10 points, or 0.1%, to 11,020. The broader Standard & Poor’s 500-stock index was up four points, or 0.4%, at 1,170, while the Nasdaq composite index rose 15 points, or 0.7%, to 2,418.

Bank of America rose 2.8% and the KBW bank index gained 1.5% after the Fed minutes showed the central bank was ready to ease monetary policy “before long.” The Fed also said for the first time that it was weighing targeting a path for the level of nominal gross domestic product as a way to increase price expectations.

But the positive sentiment was partly offset by China's bid to cool down its economy, as it sparked concerns it could crimp global growth. It was reported that Beijing raised bank reserve requirements by 50 basis points, the fourth hike this year, due to excessive lending.

A return of deal-making fuelled the positive activity, with Pfizer announcing that it would buy the pain drug maker King Pharmaceuticals for $3.6 billion in cash. Pfizer shares rose 10 cents, while King shares were up $3.99.

A rumoured bid by L’Oréal led Avon Products to add 4.2%. In was also reported that the sale of Opodo, a European online travel agency, was attracting potential bids from Google and Expedia. Google shares rose 0.5%, though Expedia shares tumbled 2%.

In current trading, Asian markets advanced on Wednesday in response to more-than-expected rise in Japanese machinery orders and stronger sales outlook from Intel.

The MSCI Asia Pacific Index rose 0.7% to 130 as of 11:11 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average climbed 0.9% and the broader Topix index increased 0.7%. The S&P/ASX 200 Index gained 0.5% in Sydney. The Kospi Index rose 0.2% in Seoul. Shanghai Composite Index was trading 0.3% higher at 2,850.

Fed minutes indicating the US central bank’s willingness to act to shore up the global recovery further boosted the stocks.