NEW YORK -- The stock market on Tuesday got a big lift from a faraway place: Australia.

The Dow Jones industrial average jumped 132 points and all major indicators rose more than 1 percent as the Australian central bank's decision to raise interest rates boosted investor optimism about the global economy. The Dow is up 244 points in two days, its best back- to-back gain since mid-July.

Investors' show of confidence ahead of a flood of corporate earnings reports came as Australia became the first major country to raise interest rates since the onset of the financial crisis last year. The move signals that policymakers see the country's economy as strong enough to withstand higher borrowing costs. That touched off hopes that other economies may also be growing.

Australia's decision also dented demand for the U.S. dollar, which, in turn, raised commodities prices. U.S. energy and materials stocks jumped as oil rose and gold reached a record high.

Investors' upbeat tone is a departure from the market's move the past two weeks, when disappointing reports on unemployment, manufacturing and consumer sentiment gave stocks their first consecutive weekly drops since July. Investors seem inclined right now to grab hold of any good news they hear, and their shifting sentiment has led to some mild volatility, including the surge upward this week.

The market's climb also came as some investors ratchet up expectations for companies' earnings for the July-September quarter. Yum Brands Inc., parent of the Taco Bell, KFC and Pizza Hut chains, reported results after the closing bell that topped expectations and raised its profit forecast for the year. Aluminum producer Alcoa Inc. reports on Wednesday.

Phil Orlando, chief equity market strategist at Federated Investors in New York, said investors are raising their expectations for earnings because few companies have issued profit warnings since the quarter's end.

"We've gone through confessional season, and we haven't had a peep from anyone," he said, referring to companies that would try to prepare investors for disappointment. "It's just crickets and tumbleweed throughout Wall Street because companies are going to beat."

The Dow rose 131.50, or 1.4 percent, to 9,731.25 after rising 112 Monday. It was the Dow's biggest gain since Aug. 21 and leaves the index fewer than 300 points from the psychological benchmark of 10,000. The Dow's two-day rise is its biggest since July 16.

It was only the fifth time this year that all 30 stocks that comprise the Dow closed higher.

The Standard & Poor's 500 index rose 14.26, or 1.4 percent, to 1,054.72, while the Nasdaq composite index rose 35.42, or 1.7 percent, to 2,103.57.

Stocks jumped Monday on news that the U.S. service industry grew for the first time in a year. Upbeat comments about the nation's largest banks also drew buyers, as did a drop in the dollar.

Bond prices fell, sending the yield on the benchmark 10-year Treasury note up to 3.26 percent from 3.23 percent late Monday.

Gold rose as high as $1,045 an ounce on the Nymex before closing at $1,039.70, its highest finish since March 2008. Taking inflation into account, the high was $2,200 an ounce back in January 1980, according to the World Gold Council, an industry trade group.

Newmont Mining Corp. jumped $3.01, or 7 percent, to $46.21.

Originally published by TIM PARADIS Associated Press.

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