The Dow industrials soared 380 points on Wall Street yesterday - its biggest point gain yet - after the Federal Reserve signalled that it may lower US interest rates.

The Dow Jones industrial average finished up 380.53 points at 8,020.78 - the market's first foray above 8,000 points since its 512-point drop on August 31st. The blue-chip barometer gained a healthy 5 per cent for the day.

The Dow is still sharply below its mid-summer peak, however. The market is 1,300 points, or 14 per cent under its 17th July record of 9,337.97.

Broad-market indexes joined in the global rally that began overseas on Monday as US markets closed for Labour Day.

The buying frenzy followed comments on Friday night by Federal Reserve chairman Mr Alan Greenspan indicating that the financial turmoil in Asia and Russia may pose more of a threat than inflation.