Sawt Falasteen - Stocks advance, euro rallies ahead of ECB meeting

US indices piled on more than two percent on optimism about the earnings season, following the upbeat tone of the companies that have reported so far.

"So far we've heard good earnings from the banks and the financials," said Jack Ablin, chief investment officer of Cresset Asset Management. "We have to hear from other sectors before we make a conclusion. But the results we've seen so far are impressive."

European stocks also had a good day, with Frankfurt's DAX jumping 2.7 percent on hopes that Russia will resume gas deliveries by pipeline later this week.

Russia has halted gas deliveries to Germany via the Nord Stream 1 pipeline, ostensibly due to technical problems, but there have been widespread concerns Moscow won't restart deliveries on Thursday as scheduled in retaliation for European sanctions over the invasion of Ukraine.

Deliveries via the pipeline are critical for Europe to fill its reserves to a sufficient level to make it through the winter without supply disruptions.

Markets have been worried Russia turning off the taps will push European economies into recession, particularly Germany, where several major industrial sectors are heavily dependent upon gas imports.

Citing people familiar with the matter, Bloomberg News reported Tuesday that Russian company Gazprom was poised to resume deliveries through the pipeline at reduced capacity.

The euro, meanwhile, rose against the dollar and the British pound, as traders mulled whether the European Central Bank could hike interest rates more than expected to fight runaway inflation.

The ECB has signaled it would raise eurozone interest rates on Thursday for the first time in more than a decade but is under pressure to do more to tackle spiraling prices.

It intends to raise borrowing costs by a quarter point, the first such move since 2011.

"In all likelihood, the ECB will raise interest rates by 25 basis points this week and follow this up with a 50-basis-point move in September," noted Matthew Ryan, head of market strategy at financial firm Ebury.

"That said, we do not rule out a 50-basis-point rate hike at this week's meeting.

"We have already seen most major central banks deliver bumper rate increases in recent weeks in an attempt to control rampant price growth," Ryan added.

The Federal Reserve's aggressive rate tightening this year has sent the dollar soaring against most other currencies in recent weeks.

Last week, the euro fell below parity with the dollar for the first time in nearly 20 years, also on growing fears of a eurozone recession as high inflation hampers growth.

- Key figures at around 2040 GMT -

New York - Dow: UP 2.4 percent at 31,827.05 (close)

New York - S&P 500: UP 2.8 percent at 3,936.69 (close)

New York - Nasdaq: UP 3.1 percent at 11,713.15 (close)

London - FTSE 100: UP 1.0 percent at 7,296.28 (close)

Frankfurt - DAX: UP 2.7 percent at 13,308.41 (close)

Paris - CAC 40: UP 1.8 percent at 6,201.22 (close)

EURO STOXX 50: UP 2.2 percent at 3,587.44 (close)

Tokyo - Nikkei 225: UP 0.7 percent at 26,961.68 (close)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 20,661.06 (close)

Shanghai - Composite: FLAT percent at 3,279.43 (close)

Euro/dollar: UP at $1.0226 from $1.0143 on Monday

Pound/dollar: UP at $1.2002 from $1.1953

Euro/pound: UP at 85.19 pence from 84.86 pence

Dollar/yen: UP at 138.21 yen from 138.14 yen

West Texas Intermediate: UP 1.6 percent at $104.22 per barrel

Brent North Sea crude: UP 1.0 percent at $107.35 per barrel

burs-jmb/to

D.Khalil--SF-PST