US investor optimism rebounded in October to its highest level since March 2001, as investors expressed renewed confidence in the US economy, according to a joint report from US investment bank UBS PaineWebber and the Gallup organisation.
The increase in optimism was most pronounced among wealthier investors, those with more than $100,000 in assets, and women.
Optimism soared 79 points to 156 among substantial investors compared with an increase of 60 points to 115 among average investors, those with assets of $10,000.
Approval for the Federal Reserve reached an all-time high in October in the wake of aggressive interest rate cuts following the September 11th attacks.
Nearly half of all investors - 45 per cent - say they are optimistic about the prospects for economic growth over the next twelve months, up from 38 per cent in September.
For the first time in three years, more investors believe the stock market is undervalued, with 28 per cent reporting this view, compared with 17 per cent who say it is overvalued.
"Broadly speaking, the surge in optimism suggests that investors are supportive of the Administration's policies and the strong actions by the Federal Reserve to stimulate the economy," said Ms Mary C Farrell, UBS PaineWebber senior investment strategist.
Investors had mixed opinions about the impact of last month's terrorists attacks on the financial markets and the subsequent effects on their own investments.
Twenty-seven per cent of those surveyed say recent events have had "very or extremely serious" implications for their personal portfolios, compared with 34 per cent who believe the impact is slight or not serious at all.
Overall, 96 per cent view terrorism as a global issue, and not one exclusive to the US.