Wall Street report: Friday close

MARKETS rallied to six-month highs on the strongest signs yet that the world's biggest economy is climbing out of recession. Major market averages, which failed to hold big gains in the past two sessions, closed near the day's highs.

The Dow Jones Industrial Average, which surrendered a 120-point rally on Thursday, flew 262.73 points or 2.6% to 10,368.86. The Nasdaq Index advanced 71.26 points or 4.1% to 1802.75. The gains of 4% or more on the week for both major indices lifted shares to pre-11 September levels.

New data confirming that the US manufacturing sector was growing for the first time in 19 months, and stronger-than-expected personal and consumer spending numbers cheered investors and economists. 'The recession is over,' said Stephen Slifer, chief economist at Lehman Brothers. 'It's not just today's data. It merely confirms what we've been seeing for a couple of months now.'

Richard Hoey, chief economist and strategist at investment fund firm Dreyfus, said the day's rally was no surprise. 'Stock markets generally do well at the start of a recovery and this appears to be no exception,' he said.

But lately Wall Street has been caught in the time lapse between signs of economic recovery and an anticipated rebound in company profits. Many companies have warned that their business is not picking up even while economic figures portray an economy bouncing back from a recession officially marked as beginning a year ago.

Tech stocks led the advance, with semiconductor giant Intel soaring $2.43 or 8.5% to $30.98. Microsoft rose $3.03 or 5.2% to $61.37. Semiconductor equipment maker Novellus leapt $5.97 or 14% to $48.56 after it said it saw signs of improvement in demand. 'There are signs of the downturn going away,' said chairman and chief executive Richard Hill. 'We see that February has followed January with continued signs of recovery.'

IBM, knocked recently on accounting concerns, jumped $4.90 or 5% to $103.02. Cisco Systems, hit lately by questions over outside partnerships involving its executives, added 73 cents or 5% to $15. Internet pioneer Yahoo! rose $2.15 or 15% to $16.6 on positive broker comments. But software maker Oracle stood out on the opposite side of the ledger, falling 63 cents or 3.8% to $15.99.

Among Dow components, AT&T rebounded 35 cents or 2.3% to $15.89, Boeing gained $1.83 or 4% to $47.79, Walt Disney tacked on 99 cents or 4.3% to $23.99, ExxonMobil firmed 69 cents or 1.7% to $41.99 and General Electric rose 93 cents to 2.4% to $39.43.

Pharmaceuticals company Andrx vaulted $8.46 or 25% to $41.91 after a US court opened the way for the company to make versions of anti-depression and smoking cessation drugs owned by GlaxoSmithKline.