The United States managed to provide a much needed upbeat feeling for investors as the year draws to a close today.
US share prices gained on data that showed a modest improvement in the housing and employment sectors and a drop in borrowing costs for heavily indebted Italy.
Craigs Investment Partners broker Chris Timms said the influential Dow Jones Industrial Index only had one down day in the past eight as investors decided there was enough positive news to warrant spending some money. The Standard & Poor's was likely to end up for the year.
Although the US initial jobless claims rose, it was the fourth straight week the figure remained below the key 400,000 level. Economists generally believed that weekly claims must remain below that level to signal labour market improvement, he said.
The transtasman currencies also rose yesterday on the back of the feeling of recovery in the US offsetting fears over Europe's debt crisis.
HiFX senior trader Stuart Ive said the kiwi might weaken next year if risks in Europe continued to dominate. Some of the region's smaller economies were already believed to be in recession with more to follow.
The New Zealand dollar might begin to separate from swings in the euro as its fortunes were more tied to the export markets of Australia and Asia, he said.
Mr Timms said the US data served to reinforce what for many investors looked like stronger prospects for US economic growth and therefore a better bet on its stocks versus overseas counterparts.
Pending sales of US homes hit their highest level since April 2010, while manufacturing activity in the key Chicago region remained strong.
It was a confirmation of a modest but sustainable recovery in the US, he said.
