Company reporting season steps up in the US in the coming week, and an early and surprising profit result from banking giant Wells Fargo & Co drove Wall Street higher on Thursday.
The bank reported it expects first-quarter earnings of $US3 billion ($4.24 billion), providing an encouraging sign that a deep freeze in borrowing activity may finally be thawing.
The Dow Jones industrial average gained 246.27 points, or 3.1 per cent, to 8083.38, while the Standard & Poor's 500 index rose 31.40 points, or 3.8 per cent, to 856.56. The Nasdaq composite index rose 61.88 points, or 3.9 per cent, to 1652.54.
If the gains are maintained when Wall Street trades overnight, the local market is likely to follow suit.
But it may be a turbulent period ahead for equity markets, CommSec chief economist Craig James said.
"The US profit-reporting season cranks up a notch over the coming week before swinging into top gear in a fortnight," Mr James said.
"Investors shouldn't be surprised if companies report declines of up to 50 per cent in earnings per share compared with a year earlier.
"Clearly, earnings disappointments won't be tolerated in this environment, but forward-looking investors want to get some sense that either conditions have potential to improve or, at worst, are unlikely to deteriorate much further."
Shares went into the Easter weekend with gains despite the largest monthly jump in unemployment since the 1991 recession. The benchmark S&P/ASX200 index rose 52.1 points, or 1.44 per cent higher at 3671.6, while the broader All Ordinaries gained 50 points, or 1.4 per cent to 3617.5.
In economic news this week, the main focus will be on the NAB business survey for March, Mr James said.
"If the consumer confidence survey is any guide, business sentiment should have improved in the latest month," he said.
The Australian Bureau of Statistics will also release its lending finance data for February tomorrow.
The Westpac-Melbourne Institute indexes of economic activity for February will be released on Wednesday, while the SEEK Employment Index for March will be released on Friday.
In company news, BrisConnections holds a general meeting tomorrow pending the outcome of a Queensland Supreme Court case brought by Macquarie Group to stop the meeting going ahead. The meeting was called by the toll road developer's largest shareholder with a view to winding up the company.
On Wednesday, Rio Tinto holds its annual general meeting in London and releases its first quarter production report the following day.
Share market gains ground
Market higher despite grim jobs data
