Shares blaze upwards

Hopes of a recovery drive stocks up

US shares led a rally across international stock markets on Wednesday, following hopes of an economic recovery.

Stocks on the US markets powered upwards, lifting the blue-chip Dow Jones index above the key 10,000 mark for the first time since 6 September.

Stock markets at close

Dow Jones: up 2.2%

Nasdaq: up 4.2%

FTSE 100: up 2.3%

Dax: up 4.9%

Cac-40: up 3.3%

The index closed up 2.2% at 10,114.57.

The optimistic mood also sent the tech-heavy index Nasdaq up 4% - above the 2,000 level - on the back of positive comments from the tech giant Cisco Systems.

In London, the FTSE 100 index closed up 2.3% at 5,333.5, in a second day of gains.

European bourses also turned in a strong performance, with the German Dax index closing up 4.9% and the French Cac-40 up 3.3%.

Hopes of a turnaround

New York traders were caught up in hopes that the US economy was finally on the rocky road to recovery.

With a sense that economic recovery is likely to occur in 2002, there are buyers who don't want to miss this move up

Alan Ackerman
Fahnestock

"It's like, 'We have got to go in now,'" said Richard A. Dickson, technical analyst for brokerage Hilliard Lyons.

"You are getting momentum going. And, momentum begets momentum."

Alan Ackerman, market analyst at brokerage Fahnestock, added: "The market is showing not only remarkable resilience, but is gaining in momentum on the upside.

"With a sense that economic recovery is likely to occur in 2002, there are buyers who don't want to miss this move up."

Economic news

Positive news from the US services sector also helped to boost sentiment.

The National Association of Purchasing Management said its non-manufacturing index jumped to 51.3 in November from a four-year low of 40.6 during the prior month.

The figure beat forecasts of 42.7 made by economists.

Confidence in the markets was further boosted by hopes of an agreement between Russia and the oil cartel Opec.

Russia announced on Wednesday that it would cut oil exports in a move that is expected to support the price of oil.

Trail blazers

The Dow Jones pushed past 10,000 - a major psychological barrier - shortly after opening.

The Nasdaq index also powered past 2,000 - another key level - for the first time since 8 August. It closed at 2047.5.

Cisco proved to be Nasdaq's most actively traded stock, jumping $1.02 to $21.54 at close.

Its gains were driven by comments from chief executive John Chambers who said that November orders met expectations.

In the more recent past, the biggest maker of computer-networking equipment has struggled with weak sales.

Technology stocks performed well across the board, with Oracle posting gains of 11.4% at $15.37.

However, there were some losers, such as Ford Motor Co, which fell 95 cents to $16.79 after issuing a profit warning.