Wall Street: Thursday close

CENTRAL bank chairman Alan Greenspan's new and improved diagnosis of a rebounding US economy proved to be just what the doctor ordered.

Markets which suffered a protracted sell-off after Greenspan cited 'significant risks' to the US economy in a speech nearly two weeks ago moved higher on his testimony to the Senate Budget Committee.

The Dow Jones Industrial Average, which has been marked down lately on declining hopes of a global rebound, regained 65.11 points or 0.67% to 9,796.07. The Nasdaq Composite Index, which at one point recently had risen nearly 50% from its September lows on anticipation of an economic resurgence this year, jumped 20.20 points or 1.05% to 1,942.58.

Although Greenspan's testimony to the Congressional committee was virtually identical to the speech which unnerved investors 13 days ago, gone was any mention of 'significant risks.' Instead, Greenspan sounded mostly upbeat about the prospects for recovery in the world's biggest economy this year - and he said he may have used 'unfortunate phraseology' in his 11 January speech.

'There have been signs recently that some of the forces that have been restraining the economy over the past year are starting to diminish and that activity is beginning to firm,' he said. Charles Gabriel, political analyst with Prudential Securities, said the Fed chairman's take on the economy had a different tone to it. 'He did offer a more optimistic assessment of the economy,' he said.

Interest rate sensitive shares were among market leaders early, but surrendered some of their gains after analysts said Greenspan's new take made an interest cut less likely when the Federal Reserve meets next week. American Express rose 30 cents or 0.8% to $36.75, Citigroup rose 30 cents or 0.8% to $49.90 and JP MorganChase added 15 cents or 0.4% to $35.90.

Major industrials hit by the manufacturing recession also firmed. DuPont added $1.77 or 4.3% to $43.04, heavy equipment maker Caterpillar rose 34 cents or 0.7% to $49.10 and Alcoa gained 22 cents or 0.6% to $35.22.

Quarterly profit reports helped mould sentiment with techs playing a lead role. Stronger than expected figures from Nokia drove its US shares up $1.09 or 4.9% to $23.30. EMC, the data storage company, leapt $2.27 or 15.6% to $16.83, and business software maker Seibel Systems charged ahead $2.09 or 6% to $37.89, on more upbeat reports.

Eastman Kodak surged $2.45 or 9.3% to $28.95 after it painted a rosier picture of its outlook. Wal-Mart, on the verge of being crowned the world's biggest company based on revenue by Fortune magazine, retreated 19 cents or 0.3% to $59.67 after touching new 52-week highs on Wednesday.

Halliburton, the oil services company formerly headed by US Vice President, soared $2.63 or 24.4% to $13.43 after it said it did not see any major additional exposure to asbestos-related claims.