Shares in America and Germany surged to record highs at the end of a volatile week.

The Dow Jones hit its third record of the week, after a raft of positive economic and corporate news.

The index surged 140.55 points, or 1.21%, to close at a new high of 11,722.98.

Germany's benchmark Dax index also rose to an all-time closing high of 7,173.22 points, up 3.12%.

The Frankfurt index was driven by sharp gains in telecom and technology stocks as the market's fascination with all things internet-related continued unabated.

Computer sales boost

In both the US and Germany, traders were buoyed by tame US inflation figures and investors' apparent indifference to the prospect of an imminent - albeit small - rise in US interest rates.

Nearly half the gain in the New York blue-chip index was due to computer-chip giant Intel, which climbed 12 points to a record close of 103 1/16 after beating analysts' fourth-quarter earnings targets.

The company received a boost from a surge in sales of personal computers during the back-to-school and holiday shopping period.

The technology-heavy Nasdaq composite index rose 107.13, or 2.7%, to 4,064.34.

Greenspan joy

On the Dax, last year's top performers, Deutsche Telekom, Mannesmann, Siemens and SAP all rose strongly, together contributing 146 points of index gains.

Market watchers said they were impressed that Federal Reserve chairman Alan Greenspan had indicated he would not let inflation get in the way of a surging US economy.

One said: "Greenspan has demonstrated that he understands the world has changed and that he doesn't intend to do anything scary to the market."