NEW YORK - US STOCKS opened slightly higher on Friday, the first trading day of 2009, as investors pinned their hopes on a better year after a horrendous 2008 that slashed up to 40 per cent off the major indexes.

The Dow Jones Industrial Average climbed 36.96 points (0.42 per cent) to 8,813.35 in opening trades and the tech-studded Nasdaq rose 1.54 point (0.10 per cent) to 1,578.57.

The broad-market Standard & Poor's 500 index advanced 2.39 points (0.26 per cent) to 905.64.

'Hope for much better returns in 2009 has permeated the marketplace,' said Patrick O'Hare, an analyst at Briefing.com.

'Unless there is a sea-change in sentiment over the course of the next two trading sessions, it looks as if we'll be able to say there was indeed a Santa Claus rally.'

Investors came back to Wall Street from Thursday's New Year market holiday ready to extend small gains Wednesday that failed to ease the blow of horrific full-year losses.

The blue-chip Dow managed a gain Wednesday of 108.00 points (1.25 per cent) to 8,776.39, but ended the year with a loss of 33.84 per cent, the worst since 1931.

The S&P 500 index also suffered its most dismal annual performance in 77 years, losing 38.49 per cent in 2008, despite Wednesday's rise of 12.61 points (1.42 per cent) to 903.25.

The Nasdaq, an index created in 1971, lost 40.54 per cent on the year, its biggest yearly loss ever, after Wednesday's rise of 26.33 points (1.70 per cent) to 1,577.03. -- AFP