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EDITIONS
Thursday, 17 October, 2002, 20:12 GMT 21:12 UK
Optimism lifts world markets
Stock markets across the world have rallied thanks to positive US news and hopes that this could signal a long-awaited start to a recovery.

Wall Street was boosted by a strong earnings update from technology giant IBM, and a government report of a lift in housing construction.


IBM set the stage for the market to resume the rally

Peter Cardillo, Global Partner Securities

European markets also welcomed news of robust profits from mobile phone group Nokia, which forecast a steady end to the year.

Investors were cheered by the run of positive updates, prompting some market watchers to suggest more good news could be on the way.

Wall Street lead

On Wall Street, the Dow Jones index of leading US shares closed up 235 points or almost 3% at 8,271.

The strong run was sparked by IBM's forecast-beating update.

The technology giant's shares leapt 11% on strong earnings for the last three months and news that it was sticking to its targets for the next quarter.


That's a good indication that retail spending is not falling off a cliff

Peter Cardillo

"IBM set the stage for the market to resume the rally," said Peter Cardillo, chief strategist at Global Partner Securities.

There was more good news from the government's Commerce Department, which reported a 13% rise in US housing construction in September, bringing it to its highest level since June 1986.

The market seemed to shrug off other, less positive, economic news. The Federal Reserve said factory production was down 0.1% in September and jobless figures showed a rise of 22,000 for last week.

"We had some good economic news with the housing," said Mr Cardillo, "That's a good indication that retail spending is not falling off a cliff".

Europe follows

The positive technology news was matched in Europe with Nokia, the world's largest mobile handset maker, reporting profits at the higher end of expectations.


We could very well be in the very early steps of a new bull market and no one wants to miss the boat

Tom Hougaard, City Index

The news sent its own shares up 11% and reverberated across European markets.

The German Dax index closed over 5% higher at 3,172 while the French Cac index ended up 3.7% at 3,183.

Markets were now awaiting further indications of the technology market's potential rebound, with quarterly updates from US groups Gateway, Nortel, Microsoft and Sun Microsystems all expected later on Thursday.

FTSE holds up

In the UK, insurance group Prudential helped the leading FTSE 100 index continue its rally, closing up 113 points at 4,170.

The leading London market has now added almost 400 points in the last week.

Prudential reported a strong set of results for the first nine months of the year, giving its own shares a 31p boost to 467p and pulling up peers Royal & Sun Alliance and Friends Provident.

Tech stocks were also up on the back of Nokia's results, with Vodafone gaining 3,75p to close at 98.5p while rival MM02 closed up 4.25p at 51.25p.

Tom Hougaard, a trader at City Index, said the gains on both sides of the Atlantic could spell good news.

"We could very well be in the very early steps of a new bull market and no one wants to miss the boat," he said.

The Markets: 9:29 UK
FTSE 100 5760.40 -151.7
Dow Jones 11380.99 -119.7
Nasdaq 2243.78 -28.9
FTSE delayed by 15 mins, Dow and Nasdaq by 20 mins
Launch marketwatch
View market data
See also:

15 Oct 02 | Business
14 Oct 02 | Business
11 Oct 02 | Business
09 Oct 02 | Business
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