NEW YORK - US stocks finished higher on Wednesday, shaking off a surge in oil prices, after a private survey showed an increase in hiring and as the Federal Reserve extended its assistance to stretched finance firms.

The Dow Jones Industrial Average closed up 186.13 points, or 1.63 per cent, at 11,583.69, marking a second straight day of strong gains for the blue chip index. The Dow is nonetheless down 13 per cent for the year-to-date.

The tech-laden Nasdaq composite finished 10.10 points, or 0.44 per cent, higher at 2,329.72 while the Standard & Poor's 500 index gained 21.06 points, or 1.67 per cent, to close at 1,284.26.

Stocks had gained in early trading after the ADP human resources firm released a report showing that US payrolls swelled by an estimated 9,000 in the month to July.

ADP said the monthly uptick in hiring was 'driven by growth in the service-producing sector.' It said that the US job situation remained generally lacklustre despite July's employment gains.

The ADP report was released days before the government is due to release a much broader monthly survey on Friday on the US job market.

'Financials got a boost after the president signed the homeowner rescue plan and the Federal Reserve extended an emergency lending program to banks,' said Mr Al Goldman, Wachovia Securities chief market strategist.

President George W. Bush signed the sweeping housing rescue plan into law that is designed to help 400,000 homeowners avert foreclosure and bolster the ailing mortgage market.

Financial stocks gained as the US central bank announced it had extended an emergency lending programme, aimed at keeping credit flowing in the stretched banking system, for investment firms to January of next year.

Merrill Lynch's stock closed 2.5 per cent higher at US$26.91. Citigroup was up 1.9 per cent at US$18.81 and Lehman Brothers finished 8.0 per cent higher at US$18.23.

The Fed said it had acted, in coordination with the European Central Bank and the Swiss National Bank, to boost lending to investment firms 'in light of continued fragile circumstances in financial markets.'

Major US banks have had to weather billions of dollars in losses tied to ailing mortgage investments that have lost their lustre amid a lengthy housing market slump.

The move by the US central bank will continue past an original September expiration date to January 30 a programme aimed at helping channel liquidity to so-called primary dealers, big investments firms which have a relationship with the Fed.

Traders said they were meanwhile bracing for major reports on economic growth and the job market and fresh corporate earnings from ExxonMobil and General Motors in the next two days.

ExxonMobil ended up 4.3 per cent at US$84.38 while GM closed down 4.2 per cent at US$11.40. -- AFP

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