Wall Street report: Friday close

INDICATIONS that American shoppers are keeping their faith in the US economy helped steady nerves frayed by a wild week on Wall Street.

The Dow Jones Industrial Average rose 78.08 points or 0.95% to 8264.39, while the Nasdaq Index improved 22.04 points or 1.78% to 1262.12.

The Dow, which dropped as low as 7532 in Wednesday's early selling stampede, finished the week up 3.1%. The Nasdaq, battered by fading hopes of an immediate rebound in tech equipment demand, slumped 4.3% on the week. For the year, the Dow is down roughly 18%. The Nasdaq is down 36%.

Behind the steadier tone was a University of Michigan survey of US consumers showing them more confident than economists had suspected.

The University's index of consumer sentiment came in at 88.1 in July, ahead of the preliminary reading of 86.5. While down from 92.4 in June, economists took the higher than expected reading as a sign that consumers in an economy which owes two-thirds of its gross domestic product to personal consumption were still willing to splurge at the local mall.

'It's another indication that American consumers have not thrown in the towel despite the stock market plunge and anaemic employment growth,' said Sung Won Sohn, chief economist at Wells Fargo. in Minneapolis. 'Consumers are holding the economic ship afloat and preventing us from going into a double- dip recession.'

The survey's findings helped boost old-fashioned names closely tied to consumer whims. McDonald's, which has been hammered lately, rebounded $1.64 or 7.5% to $23.49, Wal-Mart rose $1.18 or 2.5% to $48.18 and do-it-yourself chain Home Depot tacked on 45 cents or 1.5% to $29.30.

Basic industry companies sensitive to the economy also gained with aluminium maker Alcoa ahead $1.40 or 6% to $25.60 and heavy equipment manufacturer Caterpillar up 76 cents or 2% to $43.55. Financial services giant Citigroup came back $1.09 or 3.7% to $30.74.

Techs recovered some of the ground lost in Thursday's steep drop. Cisco Systems recouped 21 cents or 2% to $11.82, Sun Microsystems climbed eight cents or 2.2% to $3.78 and Microsoft surged $2.52 or 6% to $45.35.

Semiconductor makers were lifted in part by a measured endorsement from investment firm Goldman Sachs. Intel rose 33 cents or 2% to $17.81, Applied Materials firmed 91 cents or 6% to $14.32 and Novellus, which makes equipment to manufacture chips, was up 30 cents or 1.2% at $24.60. Conglomerate Tyco International, which on Thursday vigorously denied that it was facing a cash shortage, leapt $3.78 or 46% to $12.03 after it named Motorola president Edward Breen as its new chief executive officer and chairman. Motorola slid $1.28 or 11% to $10.90.