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Last Updated: Monday, 7 April, 2003, 20:50 GMT 21:50 UK
Wall Street euphoria proves short-lived
US shares have ended the day barely higher, after having surged wildly during the first few hours of trading.

Overnight successes produced excitement on Wall Street and beyond, and the Dow Jones Industrial Average was up as much as 243 points early in the day.

But it closed just 23 points, or 0.3%, higher, at 8,300, as investors paused to consider the lack of fundamental improvement in the economic outlook.

"It's war related, but volume is somewhat muted," said Bob Basel of Salomon Smith Barney.

"The market rose early on the continued success in Iraq. It's not really focusing on the fundamentals."

Earlier, the FTSE 100 index of leading London shares in London had closed up 121.4 points, or 3.2%, at 3,935.8, the highest level in almost three months.

The German Dax, meanwhile, gained more than 5.8% while the French Cac 40 added 3.4%.

Oil falls

Nonetheless, the price of oil remained firm - supported mainly by reassuring comments from production cartel Opec.

Earlier in the day, London Brent crude prices fell sharply, but were up 22 cents a barrel to $24.88 by late afternoon.

But gold, which has enjoyed support as a safe haven investment during the war, fell $4 an ounce to around $319 in London.

Investors' hopes

Investors hope there will now be a quick end to the war, taking one layer of uncertainty out of the global economy.

But economists have warned the gains could be short-lived as problems with the US economy would come back into focus once the war stop dominating headlines.

Earlier, Asian shares and the US dollar also ticked higher on Monday, while oil and safe haven investments have fallen as the US-led forces continued to make gains in the war on Iraq.

Don Smith, bond economist at ICAP in London
"A lot of money appears to be starting to move back into the equity market"

FTSE 100
5786.97 -
Cac 40
5057.74 -
Launch Market Watch Ticker

US troops attack central Baghdad
07 Apr 03  |  Middle East

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