Wall Street: Wednesday close

SIGNS that consumers may have saved the holiday shopping season from ruin by spending heavily on the Internet and at discount chains led by Asda owner

Gains for the major averages were cut in half in afternoon trading as a new interview with Osama bin Laden appeared to remind investors that the geo-political situation remained uncertain.

Earlier, a statement from Yahoo! that its online sales, boosted by the sale of electronic toys and products, had jumped 86% from the same period a year ago helped the Internet sector. Yahoo! shares surged 84 cents or 5% to $17.51 Rival Amazon.com leapt $1.27 or 13% to $11.10. Online auctioneer eBay rose $2.53 or 4.6% to $66.34.

Wal-Mart helped dispel some of the fears that the holiday shopping season had been a bust by stating that its sales would come in at the high end of expectations. Wal-Mart shares firmed $1.02 or 1.8% to $58.15. Broker Merrill Lynch had positive things to say about the retail shopping sector, despite what it called a 'disappointing' holiday sales season for the bricks and mortar chains. Upscale jeweller Tiffany's gained 98 cents or 3.2% to $31.38 on positive broker comments.

'These sales figures are more good news for the markets,' said Eugene Peroni of Nuveen Investments. 'Investors have been looking for reasons to get back into the market and this helps confidence.' Analysts attributed some of the buying to investors switching out of interest-bearing accounts which, in some cases, are now paying close to 1%.

The oil sector was strong as OPEC neared agreement on production cuts. ExxonMobil tacked on 60 cents or 1.5% to $39.60. BP's US shares added 71 cents or 1.6% to $45.88.

Techs closed mostly higher, although finishing well below their highs of the day. Intel up 27 cents or 0.8% to $32.29, Microsoft was higher by 41 cents or 0.6% to $67.68. IBM was marked up 95 cents or 0.8% to $122.40.

Among Dow components, American Express moved ahead 44 cents or 1.3% to $34.70 and Citigroup showed a slight gain to close at $50.22. Airlines recovered some ground lost in the wake of the scare of plastic explosives brought on board an aircraft in a passenger's shows at the weekend. AMR, parent of American Airlines, retrieved 38 cents or 1.8% to $21.57 and UAL, which owns United Airlines, rose 21 cents or 1.7% to $12.79.