The technology-laden US Nasdaq market stormed to a gain of almost 8 per cent last night as stock markets in general, staged a steady recovery.
The rebound came after the heavy selling on Thursday when the surge in oil prices and the crisis in the Middle East drove the New York market to its fifth worst points fall ever. At the close last night, the Dow was up 155.38 on 10,189.96 and the Nasdaq up 242.29 at 3,316.97.
Wall Street brushed off higher than expected US inflation figures with many in the market using Thursday's 3.6 per cent fall in the market as an opportunity to buy stock they believed had become overvalued.
The New York market was given an overnight boost by the strong results from computer group Gateway. Gateway's third-quarter results were no more than in line with consensus market forecasts. The market was also helped by strong comments from one of the market's best known bulls, Goldman Sachs analyst Ms Abby Joseph Cohen. Ms Cohen - whose pronouncements almost invariably move markets - said the recent stock market slump was overdone and made stocks a good buy, especially because a strong US economy would keep boosting corporate profit growth. She said the S&P 500 index was undervalued by 15 per cent.
"Importantly, our economic outlook still calls for real GDP growth averaging 3 per cent to 4 per cent in coming quarters, close to the trend rate suggested by productivity gains and labour force growth," Ms Cohen said in a research note.
Wall Street's recovery came despite wholesale prices and retail sales figures which were well ahead of market forecasts. In London, strong gains by telecom stocks and the recovery on Wall Street saw the FTSE-100 index gain almost 78 points after it sank to a five-month low on Thursday. London was led by Vodafone, which is in talks to buy Eircom's mobile phone subsidiary Eircell.
Vodafone alone contributed 55 points to the FTSE's gains and closed almost 9 per cent higher.
"Although everybody is still nervous about the situation in Israel and the oil price, some of the most favoured stocks have come down quite considerably. People are looking for bargains," said Mr Rolf Elgeti, global strategist at Commerzbank.
The Irish stock market, which avoided most of the Thursday turbulence, was down just under one 1 per cent at the close.
