Stocks soar as investors buy at prices eroded by worries

Stocks soared on Monday, making up about a quarter of last week's massive drop, as investors bought at prices deeply eroded by the economic uncertainty caused by air attacks on the World Trade Centre and Pentagon nearly two weeks ago.

Wall Street greeted the new week with a chorus of bullish calls by market strategists, who urged jumping back into stocks.

"By almost any measure, the downdraft in the market was overdone," said John Davidson, chief investment officer at Circle Trust Co., which manages $8 billion. "I think there is continued uncertainty and continued volatility, but if you look out a year I see a much stronger economy." Abby Joseph Cohen of Goldman Sachs and Tom McManus of Banc of America Securities were among those pounding the table. Both increased the recommended stock allocations of their portfolios - McManus for the second time since the market reopened last Monday after the attacks forced a four-day shutdown.

Also helping stocks was a plunge in the cost of energy as US oil prices sank 15 per cent.