While you were sleeping: Stocks gain on China talk

Stocks rallied on Wall Street and in Europe amid speculation Chinese Premier Wen Jiabao will announce further measures to underpin growth in the world¡¯s No. 3 economy.

Wen is due to give a state of the nation speech today, according to a former official, Li Deshui, including ¡°a new stimulus package.¡± Further support to the Chinese economy, the world¡¯s largest holder of foreign exchange reserves, would be in addition to some US$580 billion of spending already pledged.

Also helping stocks to rise, the Obama administration unveiled a US$75 billion foreclosure relief plan, giving a lifeline to homeowners who owe more than their houses are worth. First American CoreLogic estimated one in five homeowners owe more on in mortgage debt than their property¡¯s value.

The Dow Jones Industrial Average climbed 2.4% to 6884.8 and the Standard & Poor¡¯s 500 Index rose 2.4% to 713.23. The tech-laden Nasdaq Composite advanced 2.4% to 1352.44.

Caterpillar, which makes earthmoving equipment, jumped 15% to US$25.74, leading gains on the Dow. Aluminium producer Alcoa jumped 14% to US$6.32, as commodity prices rallied on talk of China¡¯s spending plans. Oil producer Chevron climbed 4.1% to US$60.09 as the price of oil rebounded. General Motors rose 9.6% to US$2.18.

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