NEW YORK, July 12: Stocks rebounded on Friday from two weak sessions as investors shrugged off lacklustre economic news and focussed on what many see as gradually improving conditions.

The Dow Jones industrial average gained 83.55 points, or 0.92 per cent, to 9,120.47 while the Nasdaq composite climbed 18.07 points, or 1.05 per cent, to 1,733.93.

The broad-market Standard and Poor’s 500 index advanced 9.44 points or 0.95 per cent to 998.14.

Economic news was less than stellar, with a producer price index report that seemed to stoke deflation fears. Overall wholesale prices climbed 0.5 per cent overall but fell 0.1 per cent at the core, which excludes the often-volatile food and energy components.

Sung Won Sohn at Wells Fargo Bank said weak pricing is bad news for the job market and could impact the overall economy.

“The lack of pricing power has forced companies to try to do more with less, prolonging the agony in the labour market,” he said.

In another negative, the US trade deficit, widened to $41.8 billion in May, coming in a shade higher compared with expectations.

But Larry Wachtel at Prudential Securities said the market seems to have strong momentum, with investors confident of an economic recovery and willing to send stocks higher even after a four-month-old rally.

“There was no headline catalyst — just that bid-beneath-the-market, ‘buy-on-dips’ strategy that has worked so well over the past four months,” he said.

European stock markets climbed on the back of a firm start on Wall Street and some snippets of positive corporate news, breaking a three-day losing streak for most major markets.

The British FTSE 100 index rose 0.73 per cent to close at 4,058.1, the German DAX 30 index added 1.73 per cent at 3,326.51 and the French CAC 40 index gained 1.29 per cent to 3,138.27.

The DJ Euro Stoxx 50 index of leading euro-zone shares firmed 1.45 per cent to 2,477.25.

On Wall Street, winners handily surpassed losers by 22 to 10 on the New York Stock Exchange and by 20 to 12 on the Nasdaq.

Dow component General Electric slipped seven cents to 28.12 in a volatile session after checking in with a second-quarter profit that matched analysts’ expectations but narrowed its 2003 profit projections.

Coca-Cola shed 10 cents to 43.91 after disclosing that authorities are investigating allegations of improper accounting practices at the beverage titan.

Intel jumped 43 cents to 23.38 after an upgrade from Thomas Weisel to an “outperform” rating from a “peer perform” on growing optimism that a recovery is underway among chip resellers.

Home Depot climbed 74 cents to 33.17 and was the Dow’s best performer following a Banc of America Securities upgrade to a “buy” rating from a “neutral” on belief the retailer has made “real strides” and that sales are bound to show meaningful improvement.—AFP