US stocks advance on positive retail earnings

Wall Street rose on Tuesday in response to higher-than-estimated earnings from Walmart and Home Depot, BHP Billiton’s $39 billion bid for Potash Corp. of Saskatchewan and stronger US production figures.

The S&P 500 climbed 13 points, or 1.2%, to 1,092. The Dow Jones industrial average rose 104 points, or 1%, to 10,406. The Nasdaq increased 27 points, or 1.3%, to 2,209.

Wal-Mart Stores surged 1.2% and Home Depot jumped 3.4% as both retailers raised their full-year earnings forecasts.

The materials sector outperformed the broad market after Potash Corp. of Saskatchewan said it had rejected a $39bn bid from BHP Billiton, describing the proposal as “grossly inadequate”. Potash shares surged 28%, with BHP Billiton stocks falling 25%.

Agilent Technologies had the largest gain in the S&P 500, rising 8% after the world’s biggest maker of scientific-testing equipment boosted its full-year forecast.

Markets were also boosted by stronger economic news. US industrial production rose 1% last month, double the median economist forecast. Wholesale costs rose last month for the first time in four months. Investors shrugged off weaker than expected housing data.

In Europe, insurers led the stocks higher on Tuesday after Aegon allayed fears of a share issue to repay state aid and bid talk helped peer Aviva move up.

The FTSEurofirst 300 index closed 1% higher at 1,056 points, ending at its highest level in a week. FTSE 100, Germany's DAX and France's CAC-40 added 1% to 2%.

Asian equities outside Japan increased as gains among Australian banks and Hong Kong developers offset worry that the Japanese economy is slowing down.

The MSCI Asia Pacific Index rose 0.3% to 118, taking its three-day climb to 1.1%. The Shanghai Composite Index closed up 0.4% extending three straight days of gains, with rises in property developers. The Hang Seng Index rose 0.1%.