EU crisis take back seat as Wall St advances overnight

Wall Street advanced overnight, erasing earlier losses, as investors chose to focus on an improved earnings outlook for Boeing and data suggesting the economic recovery was gathering momentum.

It was at least a temporary reprieve from the continuing talks in Europe to solve the region's debt crisis.

In afternoon trading in New York, the Dow Jones Industrial Average gained 1.24 per cent, the Standard & Poor's 500 Index rose 0.94 per cent and the Nasdaq Composite Index advanced 0.43 per cent.

Boeing found approval after reporting solid quarterly results and upgrading its forecast for the year. The stock rose more than 4 per cent.

Good news also came from the manufacturing and housing fronts. Data showed orders for US durable goods excluding transportation equipment climbed in September by the most in six months.

"Demand for big-ticket items seems to be alive and well," John Ryding, chief economist at RDQ Economics in New York, told Reuters.

Also good news for investors was a report showing purchases of new US houses increased more than forecast in September, though analysts cautioned about reading too much into the latest numbers.

"While the housing market still has a pulse it will not be back on its feet until there is significant job growth," Mitchell Hochberg, Principal, Madden Real Estate Ventures in New York, told Reuters.

Keeping a lid on gains was Amazon's sombre outlook, which sent its shares more than 12 per cent lower.

In addition, oil fell sharply on concerns about US demand.

Oil futures fell as much as 2.6 per cent after the Energy Department said supplies rose 4.74 million barrels to 337.6 million last week. The gain was more than three times what analysts surveyed by Bloomberg news estimated.

The euro suffered too as investors awaited the outcome of yet another summit of European Union leaders who are facing increasing headwinds in their efforts to resolve the sovereign debt crisis that risks derailing the global economy.

The euro was last 0.6 per cent lower at US$1.3831.

One positive was the endorsement German Chancellor Angela Merkel received from lawmakers in the nation's lower house of parliament before she headed to the summit.

Still, details were lacking. A key stumbling block remains the size of losses banks will be asked to take on their Greek debt holdings.

It wasn't all bad news. The new chief of the European Central Bank, Mario Draghi, said the ECB will keep buying bonds of struggling euro-zone countries.

That said, it will take more concrete measures before investors believe that Europe is ahead of the curve.