Wall Street report: Friday close

SIGNS that American consumers are recovering their confidence boosted Blue Chips.

The Dow Jones Industrial Index, down 40 points in the early going after Thursday's 117-point jump, finished ahead 82.27 points or 0.87% to 9,545.17. The Nasdaq Index, which had been the stronger of the two indices over the past week, retreated 6.59 points or 0.37% to 1,768.96. For the week, the Dow gained 3.7%, while the Nasdaq sped ahead 5.8%.

Shares re-bounded upon release of the University of Michigan's consumer confidence index for October. The index came in at 82.7, up from 81.8 in the wake of the terrorist attacks.

Alan Ackerman, of brokers Fahnestock & Co., said investors were encouraged that the consumer had shown grit in the face of terrorism, bio-terrorism, job redundancies, bleak economic news and the military campaign in Afghanistan. 'The index was a pleasant surprise,' he said. 'Despite everything, the consumer seems to be hanging in there.'

Ron Hill, equity strategist and partner at investment firm Brown Brothers Harriman said 'the consumer hasn't buckled.' 'People are beginning to feel that the worst might be over,' he said.

New home sales dipped 1.4% in September, but that figure was in line with expectations and had little effect on sentiment, analysts said.

Lockheed Martin added $1.08 or 2.2% to $49.98 ahead of the Pentagon's decision to hand the defence company the biggest portion of a $200bn. contract to build the joint strike fighter. The contract, the biggest ever awarded by the Pentagon, should also prove a boon to the British defence industry. British Aerospace could end up building as much as 15% of the equipment for the fighter. Boeing, which lost out in the contest to build the next generation of fighter jets, rose $1.07 or 4.7% to $37.57 ahead of the announcement.

JDS Uniphase, which makes fibre optic equipment, shed $1.19 or 12% to $8.77 after its quarterly earnings fell short of expectations.

VeriSign, the software security company, tumbled $10.53 or 20% to $42.81 as it disappointed investors with its earnings scorecard.

Microsoft slid 36 cents or 0.6% to $62.20 a day after it launched its new Windows XP operating system.

ExxonMobil firmed 56 cents or 1.4% to $41.12 in a strong energy sector.

Amgen, the biggest biotech pharmaceutical company, added $1.20 or 2% to $59.45 on a strong quarterly report.

Among Dow stocks, Eastman Kodak fell 33 cents or 1.3% to $30.96 and Honeywell rose 84 cents or 2.9% to $29.84.