Page last updated at 21:57 GMT, Monday, 18 May 2009 22:57 UK

Recovery hopes push up US shares

The New York Stock Exchange
Hopes that the worst may be over for the US economy has boosted stocks

US shares rose sharply in Monday trading, with positive news about housing and banking reviving investor confidence in an economic recovery.

Banks shares rallied after Wall Street analysts took an upbeat view on the battered sector.

Better-than-expected results from home improvement Lowe's Co triggered hopes that the housing market might rebound.

The benchmark Dow Jones Industrial Average ended up 2.85%, or 235.44 points, at 8,504.08.

European markets also rose, with the UK's FTSE 100 ending up 2.26% at 4,446.45 points.

Stocks fell sharply last week on fears that hopes for a recovery might be overblown.

"There's a realisation that things are going to get better," said James Cox, managing partner at Harris Financial Group.

Economy 'stabilised'

Lowe's Co rose 8.1% to $19.94. Shares in rival Home Depot rose 6.6% to $26.02.

Lowe's net profit totalled $476m (£310) in the three months to 1 May, compared with $607m for the same period last year ago - a smaller fall than analysts were expecting.

Bank of America rose 9.9% to $11.73 after Goldman Sachs analysts advised clients to buy the stock and Citigroup analysts said the bank would return to profit in the second quarter.

JP Morgan climbed 6.7% to $37.26, while Citigroup added 4.6% to $3.64.

The market's renewed optimism was cautiously shared by US Treasury Secretary Timothy Geithner.

Mr Geithner said that the US economy had "clearly stabilised" but warned that the recovery would be bumpy and fragile.

"Even as growth starts to turn positive, which will happen... it's not going to feel better for a long time for millions of Americans."

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FTSE 100
23.70 0.44%
19.54 0.34%
Cac 40
14.48 0.38%
Dow Jones
78.53 0.76%
35.31 1.58%
BBC Global 30
20.65 0.36%
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