Wall Street's major market averages were up strongly in late trading after a slow start.

But traders said that investors were still cautious after the recovery earlier in the month which pushed the Dow Jones Average up nearly 10%.

The market was encouraged by the news that the small investors had returned to stock mutual funds in September after withdrawing money in August.

The leading Dow Jones index of blue chip stocks was up 123 points to 8,495. It is now only around 15% below its peak in July.

The broader Standard & Poor's 500 index was up 17.82 points to 1085, and the Russell 2000, which tracks small-cap stocks, made a substantial gain.

The Nasdaq hi-tech stock index was up 19.71 to 1757 with a strong performance from Intel and Amazon.com.

Amazon.com rose more than $9 to $126 after revealing better-than-expected results and a big increase in its customer base.

Shares of International Business Machines (IBM) have added $2 to $148.

Banking stocks also gained also confidence grew that the Brazilian rescue plan would emerge soon.