Dow Jones sets record close again

US stocks have extended their gains in overnight trade as the Dow Jones industrials drifted up to a third straight record close, with buying sentiment strong in the absence of any major economic news.

On the New York Stock Exchange the Dow Jones industrial average attained a record closing high for a third day running.

It added 16 points to finish at 11,867.

The high-tech Nasdaq composite index was up 15 points at 2,306.

US investors were inspired by the better-than-expected sales reported by coffee chain Starbucks.

Some solid September sales figures from a number of department and clothing stores also raised hopes for improved corporate profits more generally.

The British market advanced to a five-month high with interest centred on the Anglo-Dutch steelmaker, Corus.

India's Tata Steel confirmed it was thinking about a takeover bid for Corus.

Oil companies and other commodity producers were also well supported.

London's FT-100 index gained 38 points to 6,005.

Yesterday there was a surging recovery on the Australian share market.

The All Ordinaries index jumped 73 points to 5,175 - its highest level in almost five months.

BHP Billiton shares recouped 39 cents to $25.15 and Commonwealth Bank rose 85 cents to $46.80.

Oil and gas company Santos launched a $600 million takeover bid for the Queensland Gas Company.

Santos shares rose 15 cents and Queensland Gas jumped 22 per cent to close above the bid price at $1.37.

In overnight trade on the Sydney Futures Exchange, the Share Price Index 200 contract closed up 18 points at 5,249.

The 10-year bond contract was down three points at 94.49 with the implied yield rising to 5.51 per cent.

About 7:00am AEST, the Australian dollar was trading about 74.65 US cents, up a fraction on yesterday's local close.

On the cross-rates it was at 0.5881 euros, 87.84 Japanese yen, 39.72 pence Sterling and 1.124 New Zealand dollars.

The gold price rose more than $US10 to be quoted at $US574 an ounce.

The spot price of West Texas crude oil rose 49 cents to $60.02 US a barrel.