Wall Street report: Friday close

NEW signs that the giant American economy may be clawing its way out recession sent shares higher for the third straight day.

Major US share markets traded near post-attack highs after Washington reported that far fewer Americans lost their jobs in December. The Dow Jones Industrial Average, up 25% from September lows, climbed 87.60 points or 0.86% to 10,259.74. On the week, the Dow rose 1.2%. The Nasdaq Index, which has been even stronger over the past few sessions, tacked on another 15.11 points or 0.7% to 2,059.38. The Nasdaq closed out the week up 3.6% and has risen 45% from its September lows.

The encouraging economic data built on signs over the past few days that the tech sector's long decline might be over. Economists said that jobless data indicated that the world's biggest economy was turning. Jim Glassman, senior economist at JP MorganChase, said the report indicated the US economy was righting itself. 'This is what the markets have been sensing,' he said. 'I think the worst is definitely behind us and the markets are telling us this.'

The US jobless rate came in at 5.8%, up from 5.6% in November, the highest it has been since 1995. But the most closely watched component of the report, the number of jobs lost, fell to 124,000 from 371,000 in November and 448,000 in October. In all, 1.1m. Americans lost their jobs in 2001, the highest number since 1982 when the US was emerging from recession. One aspect of the report, a 0.5% jump in wage inflation, was of concern, economists said. The Federal Reserve Board, which meets at the end of this month to consider whether the 12th. interest rate cut since last 3 January is needed to stumulate the economy, could be wary of reducing rates in light of the inflation number.

Financial services shares, which usually benefit from the combination of low rates and stronger economic growth, were among the day's biggest gainers. Goldman Sachs leapt $4.30 or 4.7% to $96.75, Citigroup gained 95 cents or 1.9% to $52 and Merrill Lynch rose $2.98 or 5.6% to $56.64. American Express spiked higher by $1.27 or 3.5% to $37.72 and JP MorganChase firmed $1.68 or 4.5% to $39. The sector was helped by comments from Prudential Securities tipping improving profits.

Techs continued their rally, but some of their strongest gains were eroded by the close. Data storage company EMC added 26 cents or 1.6% to $16.85. Oracle tacked on 16 cents or 1% to $15.45. But the two biggest tech companies barely budged. Microsoft shed 33 cents or 0.5% to $68.90 and Intel inched up 27 cents or 0.8% to $35.79 following its rapid gains from September lows.

Halliburton, the oil service company formerly headed by US Vice President Dick Cheney, fluctuated wildly on rumors, denied by the company, that it might be forced to file for bankruptcy in the face of asbestos claims. Halliburton shares closed the day down 69 cents or 6.3% to $10.22.

Starbucks, the coffee chain, jumped $1.69 or 8.3% to $22.11 after it said sales at stores open for at least 13 months rose 3% and Merrill Lynch had encouraging things to say about the company.

Energy company Dynegy rose $1.42 or 5.6% to $26.70 after it agreed to buy a natural gas pipeline from bankrupt Enron. Enron shares were marked up 2 cents or 3.1% to 66 cents.

AOL Time Warner erased an early loss to finish up 37 cents or 1.2% to $31.95 ahead of a Monday presentation at which it is expected to cut profit forecasts partly due to losses at AOL Europe.

Among Dow components, Alcoa gained $1.16 or 3.2% to $37.30, Walt Disney rose another 58 cents or 2.6% to $22.70 and IBM was higher by $1.94 or 1.6% to $125.60.