New York�s Dow Jones Industrial Average rocketed by nearly 11%, hurdling the 9000-point mark on hopes of cuts in interest rates in the US and elsewhere and buoyed by bargain-hunting.

New York's Dow Jones Industrial Average rocketed by nearly 11%, hurdling the 9000-point mark on hopes of cuts in interest rates in the US and elsewhere and buoyed by bargain-hunting.

As yesterday's session progressed, Wall Street shrugged off a flurry of bad US economic news which had capped gains in Europe.

The Dow finished 889.35 points higher at 9065.12. This was its second-largest daily points gain, next to its 936.42-point jump on October 13.

Henk Potts, a strategist at Barclays stockbrokers in London, said the recent sell-off was overdone. "It's no real surprise that bargain-hunters are coming into these markets, despite the fact expectations for the economy are tumbling and the outlook on the corporate front is gloomy," he stated.

"There's too much bad news priced into these markets. Long-term investors can look through the dark clouds ... and can see the cheap valuations."

Wall Street prices moved higher from the opening bell, following the path set by Europe and Asia, after Alcoa, the largest US aluminum producer, advanced robustly.

Canadian-based Barrick Gold and Exxon Mobil gained more than 4% as the precious metal rose and crude oil rebounded from a 17-month low.

Bank of New York Mellon and Citigroup powered ahead after banks' borrowing costs decreased and investors speculated the Federal Reserve will cut its benchmark rate later today to stimulate the sagging US economy.

New York investors digested more disappointing economic news. The Standard & Poor's/Case-Shiller 20-city housing index skidded lower by a record 16.6% in August from the year-ago month, the largest drop since its inception in 2000. The 10-city index plunged 17.7%, its biggest fall in its 21-year history.

Both indices have recorded year-over-year declines for 20 consecutive months.

In other grim news, US consumer confidence plunged to its lowest level on record. The Conference Board reported that its index dropped to 38 in October, from 61.4 in September.

Harvey Pitt, the former chairman of the Securities & Exchange Commission, the US market watchdog, told the CNBC network that the equity market had not yet hit bottom.

The UK stock market rose for the first time in three days, led by commodity producers after BP reported higher earnings and base metal prices advanced. The FTSE-100 share index closed up 73.79 points at 3926.38. The London interbank offered rate, or Libor, that banks charge each other for three-month loans, fell again. The rate for dollars shed four basis points to 3.47%, its 12th straight drop, according to the British Bankers' Association. The euro rate slid five basis points to 4.85%, the lowest since April 28. The sterling rate fell to 5.93%.

Prime Minister Gordon Brown said he wanted to prevent problems stemming from the global financial crisis spreading to eastern Europe.

"Our first priority at the moment is to stop the contagion to other countries including eastern Europe where there are problems emerging and other action has to be taken," Brown said ahead of a meeting with French President Nicolas Sarkozy.

Brown spoke as the Hungarian government said it is close to securing rescue loans from the International Monetary Fund and European Union. In Iceland, the central bank unexpectedly raised the benchmark interest rate from 12% to 18% - the highest level in at least seven years - to boost its currency.

Most of Europe's major stock markets closed higher.

France's CAC-40 rose 1.6%, at 3114.92. Germany's DAX leapt 11.3%, as the share price of Volkswagen more or less doubled again.

VW's gains have come after Sunday's announcement from Porsche that it had increased its stake in the company to 42.6% as part of its goal to take a majority stake. It also said it held an additional 31.5% in cash-settled options, that would give it indirect control of 74.1% of VW shares.

Japan's Nikkei 225 surged 6.4%, bouncing back from a 26-year low. Hong Kong's Hang Seng rose by 14.4% - its biggest gain in 11 years.