At the close of the morning session, the blue chip Straits Times Index was 81.21 points higher at 3,131.30, continuing a rebound from major losses during the first two days of the week when stock markets worldwide crumbled on US recession fears.

'This probably isn't the bottom of the pond yet, as volatility and sentiment will continue to dictate the market in the next few months,' Mr Terence Wong, an analyst with DMG & Partners Securities, said before the market opened.

He said blue chips have become bruised 'blue-black' chips.

'Should confidence return to the market, these stocks will be the frontrunners leading the charge,' said Mr Wong.

The White House and congressional leaders struck a deal Thursday on a quickly crafted stimulus plan of about US$150 billion (S$213 billion) aimed at heading off recession in the world's biggest economy.

The deal, announced just days after President George W Bush called for an economic growth package, brings the House of Representatives on board and sets the stage for likely action. -- AFP