Wall Street: Wednesday close

WALL Street's end of recession celebration resumed even as the country's biggest stockbroker said it was shifting its focus to markets outside the US.

The Dow Jones Industrial Average, down 153 points on Tuesday, rebounded 140.88 points or 1.4% to 10,574.29, up 29% since 21 September. The Nasdaq Index shrugged off early pessimism to close higher for the fourth straight day, up 24.10 points or 1.3% to 1,890.39.

The latest rally was supported by investors buying into the idea that a US economic recovery signalled by recent data would lift company profits, especially for financials and industrials. Newly-revised data showing factory orders rising a more-than-expected 1.6% in January fed hopes that the manufacturing sector was emerging from its 18-month slump. And the Federal Reserve's Beige Book, a report on current economic conditions, said a pick-up was evident in some regions.

Among financials, JP Morgan climbed $1.54 or 4.7% to $34.05, Merrill Lynch rose $1.10 or 2% to $54.40 and American Express added 87 cents or 2.2% to $39.92. Industrials on the move included General Motors, up $1.31 or 2.2% to $59.92, Alcoa, up $1.01 or 2.6% to $39.44, and 3M, ahead $1.42 or 1.2% to $121.57.

Other Dow components aiding the advance included McDonald's, higher by 44 cents or 1.6% to $28.06, and Johnson & Johnson, ahead $1.21 or 2% to $62.52. The beaten-down telecoms sector was among the biggest winners after Sprint said it was on track to meet analysts' expectations. Sprint jumped $1.27 or 8.7% to $15.85 and AT&T Wireless surged 75 cents or 8.8% to $9.28.

But Merrill Lynch, the giant broker whose symbol is a pawing bull, said it was downgrading US and UK markets in favour of Japan and global emerging markets. 'The US equity market has been our favorite for the past ten months,' Merrill global investment strategist David Bowers told clients. 'It now moves down in our rankings from first to third as we shift from an overweight to a more neutral stance.'

Techs were mixed. Data storage company EMC gave up 25 cents or 2.2% to $11.30 after it was downgraded by JP Morgan. Network switch maker McData, which numbers EMC among its biggest customers, plunged $4.28 or 27% to $11.65 after it warned that it would not meet Wall Street expectations. Intel gained 26 cents or 0.8% to $32.96.

Hewlett-Packard fell 42 cents or 2% to $20.18, indicating ambivalence over its proposed $22bn (£14.5bn) merger with personal computer maker Compaq. An influential advisory group recommended shareholders endorse the merger, boosting H-P's chances of clinching the deal. Compaq shares added 29 cents or 2.7% to $10.87.

Internet retailer Amazon.com saw its shares tumble early and then recover to close up 36 cents or 2.3% at $16.33 after its chief financial officer, who had been pushing the company toward profitability, said he was leaving for personal reasons.