Wall Str rises on global bank reform

Wall Street closed higher on as traders were encouraged by a key global bank reform...

Wall Street closed higher on as traders were encouraged by a key global bank reform,strong economic data from China and news of the latest acquisition by computer giant Hewlett-Packard.

The Dow Jones Industrial Average rose 81.36 points 0.78 per cent to 10,544.13 at the close,while the broader Samp;P 500 index gained 12.35 points 1.11 per cent to reach 1,121.90 points.

The tech-rich Nasdaq composite index was up 43.23 points 1.93 per cent to 2,285.71.

Top central bankers and regulators meeting in Basel,Switzerland on Sunday approved measures requiring banks to lift their capital reserves substantially as a buffer against future financial breakdowns.

The new regulations,called Basel III,would force banks to more than triple their current reserves from around two percent to seven per cent between 2013 and 2019.

The extended timeframe eased concerns among investors that the reforms could pressure an already shaky recovery from the worst recession in decades,analysts said.

8220;The Basel III definitely was a factor holding back financials,we were worried about how restrictive it would be,how aggressive it would be8230; they have plenty of time to achieve those goals,8221; said Marc Pado,analyst at Cantor Fitzgerald.

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News of the reforms led bank stocks to jump,with JP Morgan Chase up 3.40 per cent,Wells Fargo gaining 2.87 per cent and Bank of America seeing its stocks rise by 2.95 per cent.

8220;Clarity and relief from the weekend8217;s Basel Committee agreement on global capital requirements are helping support sentiment and the global advance in the equity markets,8221; analysts at Charles Schwab said in a note.

8220;Banks will have a period of eight years to comply with the new capital rules,which is helping boost optimism in the sector8217;s ability to succeed in strengthening the global financial system.8221;

Optimism about the global recovery was also given new impetus after Beijing said on Saturday that China8217;s industrial output rose 13.9 per cent year on year in August,compared with 13.4 in July.

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The strong rally was also supported by new acquisition news.

Security-software maker ArcSight8217;s stocks soared 25.1 per cent after computer giant Hewlett-Packard8217;s announced it was buying ArcSight for about 1.5 billion dollars.

The acquisition comes just days after HP emerged the winner in a bidding war with major rival Dell for data storage company 3PAR.