Wall Street report: Monday close

INVESTORS betting that the worst is over on Wall Street sent shares soaring to one of their largest gains ever. The Dow Jones Industrial Average surged 447.49 points or 5.41% to 8711.88, its third biggest one-day point gain ever. The Nasdaq leapt 73.13 points or 5.79% to 1335.25 to more than erase last week's losses.

The Dow has vaulted 1180 points or more than 15% from last Wednesday's intra-day low, but remains down 15% from 1 January. The Nasdaq has lost 35% on the year.

Arthur Hogan, chief market analyst at Jefferies & Co. said a rebound was inevitable given the depth of the recent decline: 'At some juncture you have to throw up you hands and say it can't get much worse.'

Analysts, who attributed some of the bounce to short-sellers covering their positions, warned that the rally could be a 'bounce in a bear market'.

Others factors cited in the comeback included companies buying back their own shares at a near-record rate, a stronger dollar and the feeling that the worst news is already out on the corporate scandal front.

Qwest, the dominant local telco in 14 US states, became the latest company to revise its bookkeeping, but its confession had been widely expected. Qwest said it had restated $1.16bn (£741m) in income over three years. Qwest shares dropped two cents or 1.3% to $1.48, down from near $60 two years ago.

But other companies recently caught in the accounting storm came back strongly. Conglomerate Tyco International jumped 58 cents or 5% to $12.61, and AOL Time Warner recovered 60 cents or 6% to $11.50.

Citigroup rose $2.43 or 8% to $33.17. JP Morgan added $2.80 or 13% to $25.05. Financial shares generally were well supported with American Express ahead $3.47 or 12% to $33.64 and insurance giant AIG up $5.48 or 10% to $62.30 on positive broker comments.

IBM recouped $4.87 or 7% to $71.27 after scotching speculation that its chief executive would not certify the computer company's books by the 14 August deadline imposed by the Bush Administration. There has been talk that some chief executives would withhold certification and that could knock individual shares and again rattle market confidence.

Kellogg's, the breakfast cereal company, issued an upbeat quarterly report which rang of confidence in its accounting. Kellogg shares firmed $2.26 or 7% to $35.60 as its 'value instead of volume' philosophy helped to boost profit margins.

The tech rally lifted Cisco Systems $1.42 or 12% to $13.24, Microsoft gained $2.83 or 6% to $48.18 and Intel tacked on 87 cents or 5% to $18.68.

The rally broadened to include old-fashioned industrial names. Heavy equipment maker Caterpillar improved $2.29 or 5% to $45.84, General Motors drove ahead $3.07 or 7% to $46.12 and aluminium giant Alcoa was marked up $1.83 or 7% to $27.43.