Dow Jones sets new all-time high

The Dow Jones has hit a number of record highs since last year

The Dow Jones has hit a fresh all-time closing high, buoyed by strong results from banking giant JP Morgan Chase and easing inflation fears.

America's leading share index, it finished Wednesday up 31 points to 12,803.8, beating the previous record close of 12,786.6 set on 20 February.

JP Morgan Chase was one of the biggest risers on the Dow after it unveiled a 55% increase in three-month profits.

Aircraft-maker Boeing also rose strongly on a big South Korean order.

Easing mortgage fears

JP Morgan Chase made a net profit of $4.8bn (£2.4bn) in the first three months of this year, up from $3.1bn for the same period in 2006.

There had been fears sub-prime mortgages would hit the banks

Analysts said the markets had reacted so positively, as the bank's strong results indicated that ongoing weakness in the US sub-prime mortgage market would not impact on the big financial houses as much as some had feared.

The sub-prime market concerns higher interest mortgages for greater risk or low wage households.

With repossessions in this sector at record levels, as US interest rates have risen, some had feared it would hit the profits of the big banks.

"It looks to me the sub-prime thing is fairly well contained and the financials are due for a rally," said Stephen Massocca, co-chief executive of San Francisco-based investment bank Pacific Growth Equities.

JP Morgan's shares ended the day up 3.8%.

Boeing's stock also gained by the same amount after it said it was the only bidder for a $2.5bn contract to build fighter jets for South Korea.

The Chicago-based company has also been buoyed by ongoing strong orders for its forthcoming medium-sized 787 Dreamliner commercial jet.

Less inflation fears

US investors have further been cheered by the latest official inflation data, released on Tuesday.

Core inflation, which excludes volatile energy and food costs, rose by just 0.1% in March, down from 0.2% in February, and 0.3% in January.

The fall makes further US interest rate rises less likely in the immediate term.

After hitting its last highs in February, the Dow then fell back due to fears that the Chinese stock market was overheating, a concern that hit stock markets around the world.

Global stocks have since gradually recovered.