Former US treasury secretary Lawrence Summers has withdrawn from consideration to be chairman of the Federal Reserve, saying it would hurt the nation for him to go forward with what would be a contentious confirmation before the US Senate.

Wall Street extended its rally with modest gains in the major indexes today following two days of sharp advances, despite economic readings which painted a mixed picture of the economy.

Wall Street barrelled higher today for the second day in a row, giving the Dow Jones industrial average its biggest two-day point gain five years after a Federal Reserve official hinted that the central bank may lower interest rates again.

Wall Street stumbled today after a key survey showed manufacturing unexpectedly contracted in November for the first time in more than three years, stoking concerns that the US economy will not be able to achieve a soft landing.