The Dow Jones industrial average soared to a new record yesterday as US investors banished fears that the Federal Reserve would raise interest rates repeatedly in its bid to quell inflation.

At the close of trading on Wall Street, the Dow was up 199.15 points at 11,299.76, easily surpassing its July 16th record close of 11,209.84. With Monday's gains, the Dow is up 23 per cent for the year.

Broader stock indicators also rose sharply. The Standard and Poor's 500 rose 23.61 to 1,360.22, and the Nasdaq composite index rose 71.37 to 2,719.70.

NYSE volume totalled 673.76 million shares, against 658.10 million in the previous session.

The Russell 2000 index of smaller companies rose 2.87 to 437.25.