US stocks leap higher

Trading surged on Wall Street after a gloomy week

US stocks have made their biggest moves since April, inspired by a technology stock rally.

The blue-chip Dow Jones Industrial Average soared 238 points - 2.3% - to 10,479.

And the technology rich Nasdaq index jumped 104 points - 5.3% - to 2,076.

Positive corporate data from Microsoft, Motorola, Yahoo and General Electric helped inspire the rally and also boost leading share indexes in London, Frankfurt and Paris.

But investors were facing a new mass of information after the market closed, including results from leading competitors to Intel and Cisco.

These late results leave investors wondering whether the rally can be sustained on Friday.

European gains

US stocks rose steadily all day after an upbeat forecast from Microsoft and better than expected profits from internet firm Yahoo and mobile phone maker Motorola.

General Electric then reported record results for the second quarter, despite the slowdown and its collapsed merger with Honeywell.

Closing prices

Dow Jones
+238

Nasdaq
+104

London's FTSE
+90

Paris' Cac
+47

Frankfurt's Dax
+88

Gains in Microsoft and General Electric together accounted for about one fifth of the Dow's gains.

This prompted a European rally, with London's FTSE index closing 90 points higher, and Frankfurt's Dax gaining 88 points.

But although the rally seemed impressive, nearly all of the increase was a rebound from a week of heavy falls across the technology sector.

Chipmakers in trouble

And the biggest question was whether the rally could be sustained after a further raft of corporate data emerged after the closing bell.

Advanced Micro Devices, Intel's main rival in the chip market, reported profits at the top end of sharply lowered expectations.

The company has been hit by dwindling demand for personal computers and fierce competition.

AMD stock crashed 27% last week after warning on profits.

This softened the blow when the firm revealed on Thursday that its second quarter profits had fallen to $17.4m compared to $207m during the same period a year earlier.

Future outlook

Juniper Networks, the second largest maker of Internet routers, had also warned the markets in advance of a profit slump.

The firm reported second quarter profits of nine cents a share, at the top end of expectations.

But its revenue of $202m - down 39% from the previous quarter - was at the low end of the forecast issued just over a month ago.

Shares in Juniper, which competes against Cisco, ended the day 16% higher before the results were announced.

With the markets already warned about the the profit slump in the first half of this year, investors were more concerned to digest the outlook for the remaining six months.