NEW YORK - US shares ended higher on Thursday following recent market volatility, as the White House and political leaders began finalising an economic stimulus plan aimed at averting a potential recession.

The leading blue chip Dow Jones Industrial Average finished up 108.44 points, or 0.88 per cent, at 12,378.61, extending the market's gains to a second day after five losing sessions.

The tech-heavy Nasdaq lifted 44.51 points, or 1.92 per cent, to 2,360.92 while the broad-market Standard & Poor's 500 index rose 13.47 points, or 1.01 per cent, to 1,352.07.

Congressional officials said the plan, pegged at around US$150 billion (S$214 billion), would likely involve tax-rebate checks and business incentives.

'Because the country needs this boost to the economy now, I urge the House and the Senate to enact this economic growth agreement into law as soon as possible,' President George W Bush said.

The Bush administration is racing to get a plan approved amid concerns that a lingering housing slump and a related credit crunch could pitch the world's largest economy into a recession.

Despite Wall Street's gains, traders said they remained vigilant for fresh volatility following sharp falls on foreign markets earlier this week. Many overseas have since rebounded, but investors remain edgy and the Dow is down around seven percent for the year.

Also on the housing front, The National Association of Realtors said existing US homes sales fell 2.2 per cent in December to an annualised sales pace of 4.89 million units.

The Federal Reserve, in a surprise move on Tuesday, slashed its main base interest rate, the federal funds rate, by a record three quarters of a percentage point to 3.50 per cent in a bid to shore up economic momentum.

Central bank policymakers are due to meet Jan 29 to 30 to mull borrowing costs further and many economists expect the Fed to unleash fresh rate cuts amid darkening economic clouds.

Ford Motor Co

US auto giant Ford Motor Co meanwhile said it had trimmed its losses and would implement new cost-cutting measures, as it reported a 2007 fourth-quarter net loss of US$2.8 billion.

For 2008, Ford said it anticipates a loss, but it expects the shortfall to be 'better' than its 2007 performance.

The automaker reported a full-year 2007 loss of US$2.7 billion, as its top executive said he anticipates an economic slowdown.

'Although our automotive operations are improving on a year-over-year basis, the US economy is slowing and the outlook for the auto industry remains challenging,' Ford's president and CEO Alan Mulally said.

Ford's shares ended down 0.3 per cent at US$6.28.

Some global markets posted strong gains, but Hong Kong share prices finished lower as news that a rogue trader had triggered huge losses of around US$7 billion at French bank Societe Generale unsettled investors.

Societe Generale identified the Paris-based trader as Jerome Kerviel and alleged he carried out a massive 4.9 billion euro fraud. -- AFP

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