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Wall Street climbed to new 14-month highs Tuesday as Dubai debt concerns waned. Miners rallied as a weaker greenback saw a rise in commodities prices.

In economic news, the Institute for Supply Management’s November manufacturing index decreased from 55.7 to a lower than expected 53.6 in November. Forecasts were for a drop to 55.

Meanwhile, signed contracts to buy homes increased for the ninth consecutive month. The National Association of Realtors report revealed a rise of 3.7% in October.

The Dow Jones gained 126.74 points, or 1.23%, to 10,471.58, the S&P 500 advanced 13.23 points, or 1.21%, to 1,108.86 and the NASDAQ put on 31.21 points, or 1.46%, to 2,175.81. 

Banks were mixed as fears the Dubai debt crisis would have a significant impact in US institutions subsided. Goldman Sachs and JPMorgan shed 1.2% and 0.6%, while Bank of America added 0.3%.

American International Group rallied 8.6% after the company revealed it was eliminating US$25 billion in government debt by offloading interests in two life insurance subsidiaries to Federal Reserve Bank vehicles.

General Electric moved closer to partnering with Comcast after reportedly reaching a deal to buy Vivendi’s 20% stake in NBC universal. GE’s shares advanced 0.9%.

Automakers reported sales in November that were either in line or better than expected. Ford dipped 0.1% after reporting a 10% drop in sales versus October.

Tech majors Microsoft and IBM gained 2% and 1.3%, while Apple weakened 1.5%.

Search engine Google advanced 1.2%.

Home Depot and Lowe’s climbed 3.2% and 3.5% following a report the government is considering tax credits or cash rebates to boost home improvement projects with a focus on energy efficiency.

COMEX gold for December delivery rose US$18 to settle at a record close US$1,199.10 an ounce, after rising as high as US$1,202.70. The price of the precious metal has increased 19 of the last 21 sessions.

Barrick Gold and Newmont Mining jumped 7.9% and 3.8%.

Energy majors Exxon Mobil and Chevron put on 1.3% each, while smaller rival ConocoPhillips added 1%.

NYMEX light crude oil for January delivery rose US$1.47 to US$78.75 a barrel.

European Markets

Diminishing concerns in regards to Dubai debt issues and macroeconomic data buoyed European investors, sending major indices well over 2% higher. Banks led the rally, while miners bounced as the price of copper rose for the third consecutive day.

Switzerland emerged from recession having grown 0.3% in the third quarter. Several European economies have recorded periods of growth recently.

The UK benchmark FTSE 100 rallied 121.49 points, or 2.34% to 5,312.17. The French CAC40 rose 95.59 points, or 2.60% to 3,775.74, while the German DAX put on 150.66 points, or 2.68% to 5,776.61.

Financials went some of the way to recovering recent losses. Deutsche Bank gained 3.3%, while Societe Generale and BNP Paribas advanced 1.9% and 1.4%.

In the UK Standard Chartered, Royal Bank of Scotland and HSBC were the big improvers, adding 5.2%, 3.3% and 2.7% respectively.

Lloyds bucked the trend, losing 1.8%.

Among the insurers AXA, Allianz and Aviva gained 3.5%, 3.4% and 2.2%.

Xstrata surged 6.3%, while Anglo American and Antofagasta put on 4.2% and 3.3%.

Aussie miners Rio Tinto and BHP Billiton gained 4% and 3.5%.

Energy majors BG Group, BP and Total were between 2.1% and 2.5% higher.

Alstom and Schneider Electric jumped 6.7% and 3.8% after they started discussions to buy Areva’s power-grid unit.  

Reports General Electric valued Vivendi’s 20% stake in NBC Universal at $5.8 billion sent the French telecommunications and media company’s shares 4% higher.

Japanese Markets

The Nikkei outperformed its Asian peers Tuesday following speculation the central bank in Japan would place the limits on the strength of the yen and stimulate lending by putting aside 10 trillion yen ($124 billion) for short-term loans. The exporters rallied on the news, while banks also gained ground.

The Nikkei 225 surged 226.65, or 2.43% to 9,572.20.

Japan’s number one bank Mitsubishi UFJ Financial Group, climbed 3.1% on the belief the new banking policy would stimulate lending.

Sumitomo Mitsui Financial Group Inc rose 1.6%, while Mizhuo Financial Group was 1.9% above the line.

Broking firm Nomura Holdings rallied 4%.

The export focused auto industry was strong, with Honda advancing 3.9%. Mazda surged 5.4%.

Toyota, the world’s largest automaker, rallied 2.3%.

Consumer electronics giant Sony spiked 3.9%, while Panasonic was 2.2%.

Hong Kong Markets

The Hang Seng rallied Tuesday on widespread optimism over the strength of the Chinese economy and positive consumer sentiment. Manufacturing on the mainland hit 18-month highs in November with financial stocks, the airlines and Chinese car markers all posting strong gains.

The Hang Seng jumped 291.65, or 1.34% to 22,113.15.

Bank of China rallied 1.6%, while Bank of Communications tacked on 1.3%.

Heavyweight lender ICBC surged 2.3%.

HSBC, which makes one-sixth of the index, spiked 1.1%.

Li & Fung, which makes clothes for Wal-Mart and Australia’s own Pacific Brands, surged 3.9%.

China’s number one gold producer Zijin Mining spiked 6.5% after its proposed takeover of Australian junior miner Indophil Resources.

Jiangxi Copper, China’s biggest producer of the metal, and coal stock China Shenhua Energy both put on 1.6%.

Air China spiked nearly 10% after increasing its stake in Cathay Pacific from 17% to 30%.

China Eastern Airlines and China Southern Airlines spiked 5.9% and 7.3% respectively.

Carmaker BYD, supported by Warren Buffet, spiked 9.4%.