Wall Street: Thursday close

CRANKY consumers and mad cow disease were shoved aside in a third straight day of strong gains. The Dow Jones Industrial Average, up more than 400 in the past two sessions, spiked 255.87 points or 3.03% to 8712.02. The Nasdaq leapt 35.62 points or 2.78% to 1316.52.

Analysts attributed the buying in part to continued expectations that Alan Greenspan and his colleagues on the Federal Reserve Board would cut official interest rates when they meet on Tuesday. According to one trader, there was a feeling that President Bush and Greenspan were in accord in fighting the threat of a market melt-down which would hurt the faltering US economic recovery. 'The hope is that a floor is being built under the market,' he said.

Evidence that the President had adopted a more active role in managing risk came with support from the US for a $30bn. IMF bail-out of Brazil. Banks exposed to loans to South America soared on the news. Citigroup gained $2.38 or 8% to $33.90 and JP Morgan surged $2.34 or 10% to $26.38.

Buyers stepped forward after a slow start to the trading day caused by retail sales data suggesting that July was a disappointing month at America's shops and malls. A retail sales survey showed a below-forecast increase as consumers reacted to corporate scandals, diving markets and increasing job uncertainty.

But retailing shares erased early losses, for the most part, to close higher. Wal-Mart, the world's biggest retailer, added 81 cents or 1.7% to $49.19. The big loser in the sector was electronics chain Best Buy, which trimmed its outlook on signs that consumers were shying away from big-ticket items including TVs and computers. Best Buy shares plunged $11.25 or 37% to $19.55.

Home Depot, the big do-it-yourself chain, could not right itself and it closed down $1.12 or 4% to $27.14.

A statement from the Canadian Government that a human victim of a mad cow disease had been detected there drove down shares in McDonald's 86 cents or 4% to $22.50. Health Canada said the person affected may have been exposed while visiting the UK and it did not think that the Canadian beef supply chain was tainted.

Martha Stewart Living Omnimedia, the company run by America's so-called 'domestic diva' of TV, dived 72 cents or 10% to $6.78 on signs investigators were taking a hard line agaionst the company's founder and figurehead in an insider trading case involving the sale of shares in a pharmaceutical company just prior to the release of negative news.

Techs participated in the afternoon rally with Cisco Systems, a big winner over the past three sessions, tacking on 21 cents or 1.6% to $13.20. Intel firmed 66 cents or 4% to $18.38.

Among Dow stocks, General Motors rose 34 cents or 0.8% to $44.20 and Walt Disney was marked up 60 cents or 4.3% to $14.50.