New York  - US stocks rose sharply Thursday, after ailing insurer American International Group Inc (AIG) suggested it would be repaying its government loans and economic indicators again signalled the recession is easing.

The New York-based Conference Board's index of leading economic indicators rose 0.6 per cent in July, the fourth straight monthly increase.

AIG's share price shot up more than 20 per cent after new chief executive Robert Benmosche said he expected to be able to pay back government loans, according to Bloomberg News. AIG lies at the heart of the US financial crisis and was bailed out for more than 100 billion dollars.

The blue-chip Dow Jones Industrial Average climbed 70.89 points, or 0.76 per cent, to close at 9,350.05. The broader Standard and Poor's 500 Index jumped 10.91 points, or 1.09 per cent, to 1,007.37. The technology-heavy Nasdaq Composite Index surged 19.98 points, or 1.01 per cent, to 1,989.22.

On currency markets, the dollar edged lower against the euro to 70.13 euro cents from 70.25 euro cents on Wednesday. The dollar climbed against the Japanese currency to 94.17 yen from 94.07 yen. (dpa)