Wall Street: Thursday close

THE likelihood of another interest rate cut from Federal Reserve Board chairman Alan Greenspan helped Wall Street snap back from a steep drop.

Markets, which had tumbled early on dismal economic data, surged late in the day, led higher once again by techs. The Dow Jones Industrial Average jumped 117.28 points or 1.25% to 9,462.90, its highest level since the day before the terrorist attacks on New York and Washington. The Nasdaq Index bounced 43.93 points or 2.54% to 1,775.44, above its pre-attack levels after a 6.5% advance in the past five sessions.

'The Nasdaq continues to outperform day in and day out,' said Peter Bockvar, equity strategist at investment firm Miller Tabak & Co. 'After two years of vicious selling, people don't want to miss the bottom in technology and are putting money into the sector.'

James Awad, of Awad Asset Management, said market action appeared to be signalling that the bad economic news had already been discounted in share prices. 'This is a way for the market to say that if this is as bad as it gets in regards to bioterrorism, poor quarterly results and the war, then we can handle it,' he said.

The economic data responsible for the early stumble showed orders for big ticket items including cars, 'planes and appliances tumbling to their lowest level in five years, sales of existing homes plummeting 11.7% in September and jobless claims rising to their highest level in nearly a decade.

'Clearly, all the numbers put together confirm the overall economic environment is becoming quite dismal,' said Anthony Karydakis, senior financial economist at Banc One Capital Markets.

Analysts said the figures gave the first comprehensive look at how the terrorist attacks and anthrax scares were hitting the world's biggest economy.

'This is really your first post September 11 number that really demonstrated how the economy was affected by that day,' said Barry Hyman, chief investment strategist at investment firm Ehrenkrantz King Nussbaum.

The bleak report card on the US economy raised the likelihood that Greenspan will cut rates for the 10th. time this year when he meets with his colleages at the Federal Reserve on November 6. Investors appear to be betting that the rate cuts, accompanied by a $100bn. stimulus package working its way through Congress, will be enough to lift America out its year-long slump.

Among techs, semiconductor giant Intel reversed an early loss to close higher by 62 cents or 1.9% to $110.66. Cisco Systems, the switching and routing giant, followed a similar trading pattern, ending the day up 51 cents or 3% to $17.74.