Markets recover strongly as positive sentiment returns

The Dow Jones Industrial Average ended with a 169 point gain, up 1.7%, at 10,268, the Nasdaq Composite Index rose 1.4% to 2,214 whilst the FTSE 100 gained 76 points to 5,244.

The Dow's strongest component by far was Bank of America Corp.(BAC ) whose shares rose nearly 5% after it reported "significant gains" in the number of modified mortgages it handles through the government's Home Affordable Modification Program. Also, it reported better payment performance on its credit card loans last month.Sentiment was further helped in the financial sector by better than expected earnings from Barclays (BARC) which drove a 6.8% to £2.94 in the U.K., whilst its American depositary shares soared 13.7%.

The dollar fell as investors took on risk as fears about the impact of the potential default of Greece on the wider European economy ebbed. That helped the prices of commodity related stocks. Gold ended $29.80 an ounce higher at $1,119.80 an ounce whilst oil rose $3 to $77 a barrel after going below $70 less than 2 weeks ago.