US markets rally as Facebook moves closer to IPO

Stocks received a lift in afternoon trading as social networking giant Facebook prepares to make what could be one of the largest market debuts in history.

The Dow Jones rallied 0.82% to 12,736, while the S&P 500 climbed 0.81% to 1,322 and the Nasdaq Composite index rose 0.49% to 2,837.

Optimism in Europe and China has also boosted sentiment following better than expected data from China and Germany, and news of progress on the Greek debt swap deal talks emerged.

Facebook, created by Mark Zuckerberg (pictured), will file plans with regulators today to for its IPO, which is set to raise up to $10bn, it has been reported. Morgan Stanley is reported to be the administrator, while Goldman Sachs, JP Morgan, Barclays and Bank of America are also rumoured to be involved with the sale.

European markets also rallied this afternoon on positive data from Germany and China, in addition to news a contraction in eurozone manufacturing activity had slowed.

The FTSE 100 jumped 1.28% to 5,754 by 2,30pm, while the French Cac 40 moved 1.42% higher to 3,345 and the German Dax index gained just over 2% to reach 6,588.

The eurozone purchasing managers index rose to 48.8 from 46.9 in December although, of all the euro-area countries, only Germany registered a reading above 50, indicating expansion.

In China, data showed the manufacturing sector slightly expanded in January, easing fears of a hard landing for the world's second largest economy.

Greek finance minister Evangelos Venizelos said talks between Greece and its private creditors are "one formal step away" from a deal needed to avoid a messy default.