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US stocks rose 1.4 per cent last week, with the Dow Jones surging through the 7,400 barrier for the first time as bond yields fell and confidence grew that corporate earnings will exceed expectations. JP Morgan, General Electric and Merck led the gains, which were the biggest in a month. Figures showing the unemployment rate had fallen to the lowest in a generation gave a strong finish to the week.

In London, the FT-SE 100 rose 23 points to 4,645. Banks succumbed to profit taking, pulling the index down as the Halifax made its debut on Monday. Gains came in the last two days as the monetary authorities met to raise interest rates.

In Germany, the DAX index rose 4.2 per cent on the week to 3,695.29 as the dollar surged against the mark. The main beneficiaries were the export shares. Lufthansa and Linde both rose by more than 12 per cent and the car manufacturers Daimler-Benz and Volkswagen also registered substantial gains. Lufthansa's rise was helped by talk that it will sell its stake in Hapag-Lloyd to the steelmaker Preussag.

In France, the CAC rose on a post-election rally, also boosted by gains in the dollar. The index put on 5.2 per cent, closing at 2,719.25. Oil stocks rose and retailers were lifted by hopes that the economic policies of the new government will boost sales.

Copyright: IOS & Bloomberg