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Stock market investors may not be out of the woods yet, but there is some encouragement to be drawn from the US Federal Reserve's decision to buy up $700 billion (£382 billion) of toxic loans.
Credit Suisse reckons we are now moving away from a full-blown bear market to a market where share prices are likely to trade within a narrow range for some time. It won't be exciting, but Credit Suisse reckons it also means we will not see again the lows tested by global stock markets last Thursday.
Another positive factor for equities is the falling oil price, which the broker expects to average out at $115 a barrel over the next year. It says this will improve economic growth while reducing inflation. A further factor is last week's easing of China's monetary policy, aimed at stabilising economic growth at 9% year-on-year.
But the broker concedes that problems persist. The economic backdrop remains about as gloomy as Europe's Ryder Cup performance, and we'd best not mention that US housing market where more than two million homes remain unsold.
After Friday's record one-day relief rally, which saw the FTSE 100 index surge more than 400 points, it seemed inevitable City investors would choose a more leisurely pace today. As a result, share prices gave up early gains as the profit-takers took advantage. The blue-chip index was down 21.6 points at 5289.6. By contrast, the broader FTSE 250 index was off 149.6 at 8833.0.
The Dow was in retreat on Wall Street this afternoon, dropping 140.8 to 11,247.6 despite news that one of Japan's biggest banks had taken a stake in struggling Morgan Stanley.
Financials gave back some of Friday's spectacular gains, accrued ahead of the deadline for the introduction of the four-month ban on short-selling. Investors can buy bank shares and they can sell them but they will not be able to sell shares they do not already own.
The UK's biggest hedge fund operator, Man Group, fell 19½p to 450½p. It is not on the FSA's banned list, so will not receive protection from short-selling. Meanwhile, life assurer Friends Provident shed 5.9p at 98.1p and rival RSA Insurance gave up 7p at 158.8p.
Hopes that the measures being taken by the US government to absorb toxic loans will go some way to revitalising the US economy boosted the oil price. That, in turn, lifted the big oil producers, with BP adding 12p to 502¼p, BG Group 47p to 1172p and Royal Dutch Shell 54p to 1649p. Dana Petroleum rose 29p to 1322p, with Deutsche Bank starting coverage of the shares with a buy rating and 2700p target.
Once again, the miners made much of the running. Eurasian Natural Resources put on 44p at 706p while Xstrata rose 108p to 2452p and BHP Billiton gained 54p at 1501p.
The UK's biggest plumbing equipment supplier, Wolseley, jumped 50½p to 464½p after assuring shareholders it has no plans to raise extra capital or renegotiate with its bankers. Full-year results showed the group was still finding the going difficult. Collins Stewart is a seller of the shares, with a 342p target.
Buy-to-let mortgage provider Bradford & Bingley led second-liners higher with a rise of 2¼p to 30p. Weekend reports claimed the Financial Services Authority has been busily lining up buyers to rescue the bank.
British Energy was unmoved on 720½p, with French power group EDF expected to approve a sweetener to its proposed takeover terms. It is expected to offer 774p in cash, which would value British Energy at £12.35 billion.
Bombed-out second-liners attracted support. Takeover favourite Rank Group added 4p at 76¼p while Debenhams put on 2p at 51p.
Aerospace support services group Aero Inventory jumped 35½p to 449¾p in response to record profits of $73.1 million (£39.7 million).
