Blue-chip stocks posted their highest close in more than four months on Thursday, as expectations that the Federal Reserve will fire off another round of interest-rate cuts to pump up the US economy overshadowed fears that the nation is teetering perilously near to recession.

The Dow Jones Industrial Average jumped 96.27 points, or 0.88 per cent, to 10,983.63, its highest close since September 14, according to the latest data. The Nasdaq composite index edged up 10.22 points, or 0.37 percent, to 2,782.95.

The benchmark Standard & Poor's 500 added 7.49 points, or 0.55 per cent, to 1,373.50.