Wall Street report: Friday close

SIGNS that things might not be as bleak as feared helped push shares higher to cap a topsy-turvy week on Wall Street.

The Dow Jones Industrial Average climbed 143.50 points or 1.7% to 8427.20. In a holiday-shortened week, the Dow slumped 355 points on Tuesday, rose 117 points on Wednesday and fell 141 points on Thursday. The net result was a decline of 2.7% for the week. The Nasdaq rebounded 44.29 points or 3.5% to 1295.29 to end the week 1.5% lower.

Washington provided fodder for the day's rally when it said that the US unemployment rate dropped unexpectedly to 5.7% in August from 5.9% in July to its lowest level since March. The economy added 39,000 jobs in the fourth straight month of gains, but the headline figures hid a more confusing picture, according to economists.

All of the job gains were accounted for by Government hiring, with many of the positions opening up in airport security. And one economist called the drop in the unemployment rate 'a statistical fluke' tied to seasonal revisions.

The report was good for one thing, economists agreed. The positive headline numbers would bolster consumer confidence at a time when it is badly needed. Recent figures have indicated that the US consumer - a stalwart in continuing to spend through the latest downturn - might be beginning to buckle. With consumer spending comprising two-thirds of the US economy, a retreat from the shopping malls would increase the chances of a double dip in the US economy.

The second reason for buying was provided by Intel, the world's biggest semiconductor maker, in a report out after the close of trading on Thursday. Intel said that demand was slow and revised downward its revenues target to the bottom of its previously published range. But the report was taken as good news because it did not forecast a further drop in demand. Lehman Brothers upgraded Intel shares, down 12% this week, on the basis that finally much of the bad news might already be in the stock price.

Intel shares bounded higher by $1.11 or 7.4% to $16.22, taking the rest of the tech sector with them. Microsoft surged $1.91 or 4.2% to $47.82 and arch rival Oracle leapt 51 cents ot 5.6% to $9.63. Hewlett-Packard, a component of the Dow Industrials, firmed 65 cents or 5% to $13.50 apparently on hopes that if chip demand was stabilising then that would mean stronger demand for personal computers and printers.

Industrial and financial shares participated in the rally, with DuPont up $1.92 or 5.2% to $39.17, Citigroup higher by 98 cents or 3.3% to $30.28 and American Express ahead 58 cents or 1.7% to $34.69. Retailer Wal-Mart, marked down earlier this week when its latest sales numbers fell below expectations, rose $1.84 or 3.6% to $52.78.

But not everyone was convinced that the rally would hold. Bill Gross, widely- respected manager of the $61bn. Pimco Total Return Fund, forecast that the Dow was headed for a fall due to false expectations and puffed up figures.

'My message is as follows: stocks stink and will continue to do so until they're priced appropriately, probably somewhere around Dow 5,000, S&P 650, or NASDAQ God knows where,' he said. 'Earnings have been phonied up for years and the market still sells at high multiples of phony earnings.'