The Dow Jones was up 62.13 points at 8,801.15 at midday in New York, the S&P; 500 was up 8.57 at 947.72, and the Nasdaq was up 11.48 at 1,864.56.

A Labor Department report showed first time jobless benefits claimants fell to 601,000, better than expectations. The Commerce Department said retail sales increased 0.5 per cent in May after two months of declines.

In the UK, RBS was the top riser among a buoyant banking sector on the back of news that it plans to hive off unprofitable business customers to a separate division. The sector in general enjoyed a rally on a note from JPMorgan that it remains overweight on investment and credit banks.

RBS was up 1.8p, or 5.75 per cent, to 39.7p. Barclays wasn’t far behind, up 16p or 5.55 per cent to 304.50p.

The FTSE 100 index closed up just 25.12 points higher at 4,461.87 as banking sector gains were offset by falls in commodities.

Oil companies retreated after recent gains, despite oil prices rising for a third day, above $72 a barrel and hitting an eight-month high in New York on the back of a larger-than-expected drop in US crude inventories.

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