The Dow Jones Industrial Average has topped the 10,000 mark for the first time in a year.

World markets were boosted by the news that US bank JP Morgan Chase reported a better-than-expected profit in the July-to-September quarter.

The Dow closed up 144.8 at 10,015.86, its highest since October 2008.

But correspondents say the Dow is still far off its all time highs and the US economy has a long way to go before there is real recovery.

Earlier, European markets had also closed higher, with banking stocks leading the way up.

‘Largely psychological’

The BBC’s Michelle Fleury in New York says that a year ago major banks were struggling under the weight of huge credit losses and the US administration was doing its best to avoid an all out collapse of the financial system.

Stocks continued to fall. They hit a 12-year low early in March before staging their comeback.

Analysts said the latest rise in the Dow could encourage more investors into the market.

“Dow 10,000 may be largely psychological, but with tremendous levels of cash on the sidelines this may still be a call to action for investors,” said Lawrence Glazer from Mayflower Advisors in Boston.

The Nasdaq also rose 32 points to 2,172.23, while the Standard & Poor’s 500 climbed 18.83 points to 1,092.02.

JP Morgan Chase is the first big US bank to report third quarter results.

The second-biggest US bank made a net income of $3.6bn (£2.5bn), compared with $527m in the same period of 2008.

Strong performance in its investment banking division cancelled out losses on credit cards and consumer loans.

On Thursday, Goldman Sachs is expected to announce hefty profits, but Citigroup is likely to post a loss.

Bank of America is also expected to have made a loss when it announces its third quarter results on Friday.

Chinese exports increase

Earlier on Wednesday, London’s FTSE 100 had risen 2% to close at 5,256.1, while France’s Cac 40 index and Germany’s Dax both also saw gains of more than 2%.

Banking stocks were among the top risers, with Barclays up 6.6%, Societe Generale climbing 4.7% and Deutsche Bank adding 4.2%.

Markets were pushed higher by official export figures from China, which suggested that economies in the rest of the world were improving.

Chinese exports fell to $115.9bn (£73bn) in September, which was down 15.2% from the same month last year, but was the smallest fall in nine months.

Dong Tao, an economist at Credit Suisse in Hong Kong, said he expected exports to increase in the next couple of months.

“There are some rush orders coming to China for Christmas, so I expect probably a pretty strong rebound in November and December,” he said.

BBC News