Wall Street: Monday close

THE Thanksgiving Day celebrations kicked off early on Wall Street as investors cooked up a broadly based rally.

Falling oil prices, stronger retail sales and promising news from the Afghanistan war front fed into positive investor sentiment which has helped lift US markets to their highest levels since the 11 September terror attacks.

The Dow Jones Industrial Average surged 109.47 points or 1.11% to 9,976.46, while the Nasdaq Index gained 35.84 points or 1.9% to 1,934.42

Analysts said investors had reason to be optimistic. 'The news out of Afghanistan continues to be favorable,' said Peter Cardillo, director of research at investment firm Westfalia Investments. 'It looks as though Osama bin Laden's days may be numbered. I think that is what is continuing to fuel the rally here.'

Cardillo said investors might pack most of their activity into the first three days of the trading week ahead of the Thanksgiving Day holiday on Thursday. Thanksgiving Friday is usually a quiet session with many investors and traders taking time off to be with their families. It is also one of the busiest shopping days of the year.

Lowe's, the second biggest do-it-yourself retail chain, boosted hopes that the holiday shopping season could surpass expectations when it reported a 24% jump in third-quarter profits. Lowe's shares leapt $2.75 or 6.8% to $43.10. Wal-Mart, the world's biggest retailer, added 65 cents or 1.2% to $55.75.

Retailing experts said there was anecdotal evidence that retailers, partly due to promotions and sales, were seeing strong traffic in the lead-up to biggest shopping season of the year. The shopping rush was another sign that US consumers, helped by interest rates at their lowest in 40 years, oil prices at two-year lows and the prospect of a $100bn (£66bn) economic stimulus package from Congress, could be a prime force in lifting the world's biggest economy out of its year-long slump.

One economic study said tumbling oil prices had added $130bn in savings to the US economy. Oil prices have fallen from $37 to $17 a barrel. ExxonMobil, America's largest oil company, saw its shares trimmed another 53 cents or 1.4% to $37.01. A $35bn merger lifted Phillips Petroleum $1.53 or 3% to $53.35 and Conoco $1.68 or 7% to $25.98. The combined company will be America's third biggest oil producer.

New economic data was not as negative as expected. US housing starts in October fell 1.3%, above expectations.

Financial services shares were stronger on expectations that credit worries might dissolve in a stronger economy. American Express jumped $1.07 or 3.2% to $34.20. Citigroup gained $1.18 or 2.4% to $49.98.

AOL Time Warner firmed 85 cents or 2.3% to $37.75 after its 'Harry Potter' movie posted a record opening at the weekend. Analysts said ticket sales for the series of 'Harry Potter' films could reach $3bn over the next few years.

Aluminium giant Alcoa climbed $1.37 or 3.7% to $38.49 after it announced it was cutting 6,500 jobs or 4.6% of its workforce in the US and Europe. Texas Utilities fell $1.81 or 3.8% to $45.59 on news it was selling the West Burton power station in Nottinghamshire to London Electricity Group.

Tech leaders, some of them up 60% from September lows, posted strong gains. Cisco Systems climbed 69 cents or 3.5% to $20.71. Handheld computer makers Palm gained 44 cents or 12.8% to $3.87 and Handspring $1.41 or 35.3% to $5.41 on suggestions they might be merger candidates.

Airlines continued their rebound. Delta leapt 85 cents or 3% to $28.82 and AMR, parent of American Airlines, gained 71 cents or 3.5% to $20.77.

Among Dow components, General Motors tacked on 44 cents or 0.9% to $47.74, Walt Disney firmed 74 centrs or 3.6% to $21.50 and DuPont rose 85 cents or 1.9% to $44.77.