New York  - Major US stock indices posted strong gains Tuesday following Europe's lead, capping the US market's best month in nearly seven years.

Financial firms led the gains on signs that banks were starting to increase lending in the current recession. An index of financial companies jumped 6.7 per cent.

The rally comes ahead of an emergency summit of the Group of 20 major economies Thursday in London to help pull the world out of recession. US President Barack Obama and other world leaders began arriving Tuesday in London.

Europe's Euro Stoxx index surged more than 3 per cent earlier Tuesday to complete its first monthly gain since August.

The blue-chip Dow Jones Industrial Average gained 86.9 points, or 1.16 per cent, to 7,608.92. The broader Standard & Poor's 500 Index rose 10.34 points, or 1.31 per cent, to 797.87. The technology-heavy Nasdaq Composite Index was up
26.79 points, or 1.78 per cent, to 1,528.59.

On the month, the Dow industrials gained 7.7 per cent and the S&P 500 8.5 per cent, their best performances since 2002. Both stock indices have rallied strongly since tumbling to 12-year lows on March 9.

The US currency slipped against the euro to 75.47 euro cents from 75.75 euro cents on Monday. The dollar leapt to 98.82 Japanese yen from 97.45 yen. dpa