Overnight Markets: US stocks gain on news policymakers may take action

US stocks advanced on Thursday amid reports major central banks are preparing coordinated action to assist economies battered by Europe’s sovereign debt crisis.

The Dow Jones industrial average gained 155 points, or 1.24%, to 12,652. The Standard & Poor's 500 Index rose 14 points, or 1.08%, to 1,329. The Nasdaq Composite Index added 18 points, or 0.63%, to 2,836.

According to Group of 20 officials, the central banks from major economies will take measures to stabilise markets and prevent a credit squeeze if necessary. Some investors are expecting the Federal Reserve may unveil more easy money to counter sluggish growth when it releases its policy statement next Wednesday after its two-day meeting.

Adding to the recent evidence of a slowing economic recovery, there was an unexpected rise in the number of Americans filing new claims for unemployment benefits last week.

In other US data, consumer prices declined 0.3% in May, the biggest fall in more than three years, which could also give the Fed room to ease policy next week.

Energy was the top-gaining sector. Chevron Corp was a top boost to the Dow, up 1.8%. Exxon Mobil increased 1.9% and Cabot Oil & Gas Corp. jumped 8.6%.

Homebuilders also advanced with Home Depot, the largest US home-improvement retailer, climbing 2.3%. Lennar Corp. increased 3.6% and PulteGroup Inc. added 5.2%.

Elsewhere, Disney, the world’s largest entertainment company, advanced 2.1%. Travelers added 2.4%, while Bank of America, the second-biggest US lender, climbed 2.1%.

Kroger Co. climbed 6.1% after the company said profit for the year ending 31 January will be as much as $2.40 a share, up from a prior forecast of as much as $2.38.

On the negative side, Nokia Corp plunged 15.8% after it said it plans to cut another 10,000 jobs, a fifth of its work force, and said its phone unit would post a deeper-than-expected loss in the second quarter.

In Asia, equities are set for their biggest weekly advance since February on Friday as optimism the US Fed will act to stimulate economic growth overshadowed fears that Europe’s debt crisis will worsen.

The MSCI Asia Pacific Index added 0.6% to 114 as of 11:33 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average added 0.2%. Australia’s S&P/ASX 200 Index gained 0.4%. Hong Kong’s Hang Seng Index advanced 1.2%, while China’s Shanghai Composite Index rose 0.2%. South Korea’s Kospi Index fell 0.7%.