Dow Jones

WORLD stocks rose to more than 18-month highs and oil snapped a five-day losing streak as unexpected strength in US consumer spending and earnings at JPMorgan Chase and Intel underscored the American economic rebound.

Investors remained cautious about Greece's debt, however, and pushed risk premiums on the nation's bonds higher, despite a European Union rescue plan hammered out last weekend.

The US government reported retail sales jumped 1.6 per cent in March, the largest increase since November, as consumers stepped up purchases of vehicles and a wide range of goods. The data, which topped analysts' estimate for an increase of 1.2 per cent, drove optimism about consumer spending, which drives about two-thirds of US economic activity.

"This whole rally is being vindicated by earnings, which have been phenomenal, and the comeback of the consumer," said Keith Springer, president of Capital Financial Advisory Services.

Intel's forecast-beating results reinforced hopes for an acceleration in the technology sector's recovery.

US stocks notched a fifth straight day of gains as stronger-than-expected corporate results and March retail sales pushed the S&P 500 past 1,200 for the first time in more than 18 months.

The Dow Jones industrial average rose 103.54 points, or 0.94 per cent, at 11,122.96. The Standard & Poor's 500 index gained 13.34 points, or 1.11 per cent, at 1,210.64 – the first time it has been through the 1,200 mark in 18 months.

The pan-European FTSEurofirst 300 also closed at an 18-month, at 1,105.32 points. European banking and tech stocks led the rally, on the back of US results.