Banks lead Wall Street up, appetite for equities rises

US stocks ended solidly higher after European debt fears eased and sparked a broad advance, led by banks and commodity-related shares.

The Dow Jones industrial average was up 83.48 points, or 0.72 percent, at 11,755.36. The Standard & Poor's 500 Index was up 11.47 points, or 0.90 percent, at 1,285.95. The Nasdaq Composite Index was up 20.50 points, or 0.75 percent, at 2,737.33.

European shares hit a 28-month high as sentiment improved following strong demand for Portugal's debt, while a rally in metals prices boosted resource-related equities.

The FTSEurofirst 300 index of top European shares finished 1.5 percent firmer at 1,163.94 points, the highest close since September 2008.

The Nikkei average ended flat, backing away from an eight-month high hit early as traders locked in profits, but sentiment remains strong as upbeat US earnings and a softer yen spurred foreign investors to buy up financial and property shares.

The benchmark Nikkei ended the most active trading day of the new year up 0.02 percent or 2.12 points at 10,512.80, after rising early in the session to 10,576.51, its highest intraday level since May 13, 2010.

The broader Topix added 0.3 percent to 929.64.