Wall Street report: Monday close

WALL Street's biggest two-day surge in more than a year lifted America's leading share market average to within 11% of its record closing high.

The Dow Jones Industrial Average, up 262 points on Friday, leapt another 217.96 points or 2.1% to 10,586.82. The Dow's highest close of 11,722 came on 14 January, 2000. The Nasdaq Index, after rallying 4.1% on Friday, surged 56.58 points or 3.1% to 1859.32, still far from its record close of 5048 on 10 March, 2000. Both major indices finished the day at their highest level since last August.

Growing hopes that the recession is over, stoked by figures on Friday showing the manufacturing sector beginning to stir out of its 19-month long slump, helped lift shares across the board. Analysts said investors, mindful that manufacturing had led the US into recession, were increasingly confident that the economy as a whole was in recovery mode and that the profit pinch holding shares in check was largely over.

Banks held back lately due to their exposure to Enron and Argentina were among leaders, with Citigroup up $1.81 or 4% to $47.61 and JP MorganChase leaping $2.84 or 9.6% to $32.50.

General Motors gained traction on an upgrade from JP Morgan, surging $3.73 or 6.8% to $58.70.

Techs shrugged off a profit warning from Oracle, number two in software to Microsoft. Oracle, down $2.32 or 15% to $13.67, was among the few high-profile techs not participating in the rally. Microsoft rose $1.93 or 3.1% to $63.30. IBM, knocked by accounting worries lately in the wake of Enron's collapse, recovered $2.88 or 2.8% to $105.90. Business software maker Manugistics leapt $3.03 or 21% to $17.60. Intel, the subject of analyst speculation that it might yet issue a caution on its outlook, gained 87 cents or 2.8% to $31.85. Networking equipment maker Cisco Systems added $1.48 or 10% to $16.48.

A broker downgrade knocked do-it-yourself chain Home Depot, down 39 cents or 0.8% to $49.90.

News Corp climbed $1 or 3.8% to $27.40 after it said it saw signs of firming in US advertising rates. Rival Viacom was marked up $1.66 or 3.5% to $49.45. Walt Disney, which has been under pressure on doubts over its outlook, slid 43 cents or 1.8% to $23.56.

TRW was higher by 55 cents or 1.1% to $50.60 as fellow defence equipment maker Northrop Grumman pressed its hostile takeover bid, worth $11.4bn (£7.5bn) when debt is factored in. Northrop shares lost $4.25 or 4% to $103.50.