WALL Street smashed its day-old record yesterday, ending the day within 20 points of breaking the 5,400 mark on the Dow Jones industrial average.

The market took off after long term interest rates fell in the bond market amid heightened expectations that the Federal Reserve would cut key rates.

The Fed's policy-making Open Market Committee yesterday began a two-day meeting, and the market is anticipating a quarter-point cut in the key short-term rates, the second in six weeks.

Circuit breakers were triggered to slow computerised trading after the Dow rose 50 points.

Trading was heavy with some 467 million shares changing hands. Gainers outnumbered losers by more than two to one: 1,643 to 770 with 672 unchanged.

On the bond market, the average rate for the benchmark 30-year bond fell to 6.03 per cent from 6.09 per cent on Monday.