NEW YORK, May 3: With shaky conviction, Wall Street investors are starting to come out from their shell in anticipation of global credit squeeze easing and a skirting of a major US economic downturn.

Over the week to Friday, the Dow Jones Industrial Average gained 1.29 per cent to 13,058.20. The blue-chip index now has clawed back most of its losses from a dismal start to 2008 and is down just 1.56pc for the year.

The Standard & Poor’s 500 broad-market index advanced 1.15pc on the week to 1,413.90, moving past a key resistance level of 1,400 and limiting its loss for the year to 3.7 per cent.

The technology-laden Nasdaq composite rallied 2.23 per cent for the week to 2,476.99.

In an action-packed week, investors learned that the US economy did not contract in the first quarter of 2008 but expanded at a 0.6 per cent pace, avoiding the kind of steep decline some had feared.

The Federal Reserve meanwhile cut its base lending rate a quarter point to 2.0 per cent while giving what analysts said was a tentative signal it would not go lower barring a worsening economy.

Finally, data showed the US economy lost 20,000 jobs in April, significantly fewer than expected, in a sign that the labor market and overall economy may be holding up better than feared.

Make no mistake, there is still a rough road ahead for the US economy, said Avery Shenfeld, economist at CIBC World Markets.—AFP