U.S. markets close with solid gains

NEW YORK, Feb. 8 (UPI) -- U.S. markets posted solid gains Tuesday after the People's Bank of China said it would increase its one-year lending rate to slow inflation.

China's central bank is expected to make more moves to gradually reduce liquidity. Late last year, Chinese officials said 2011 would include policy changes to rein in inflation.

U.S. investors reacted positively. By close of trading, the Dow Jones industrial average added 71.52 points, 0.59 percent, to 12,233.15. The Standard & Poor's 500 index added 0.42 percent, 5.52, to 1,324.57. The Nasdaq composite index of tech-dominated stock added 13.06 points, 0.47 percent, to 2,797.05.

On the New York Stock Exchange, 1,914 stocks advanced and 1,073 declined on a volume of 3.8 billion shares traded.

The benchmark 10-year treasury note fell 25/32 to yield 3.739 percent.

The euro rose to $1.3626 from Monday's $1.3585. Against the yen, the dollar rose to 82.34 yen from Monday's 82.30 yen.

In Tokyo, the Nikkei 225 index rose 0.41 percent, 43.94, to 10,635.98.

In London, the FTSE 100 index gained 0.67 percent, 40.30, to 6,091.33.