The Iseq index of Irish shares closed at 5,619.84 in Dublin today, up 48.54 points or 0.87 per cent.
The index had broken through the 5,700 mark at lunch-time but traders said poor economic data emerging from the US led to a sell off in the afternoon, particularly amongst the financial stocks.
The banks were first out of the blocks this morning as positive sentiment towards the FTSE banking sector spread across the Irish Sea, driving them up by as much as 3 per cent.
That changed when the US markets opened for business. Although Goldman Sachs booked a $2.1 billion quarterly profit, providing further evidence that it has escaped the worst of the credit crunch, and oil prices edged downwards, traders said weak economic figures from the US dampened afternoon trading.
Irish Life and Permanent was one of the bigger losers on the day, closing down almost 3 per cent at €9.35. The shares traded across a 7 per cent spread over the day, with them trading up 4 per cent at one point. Traders said the volatility was probably related to a trading statement due to be released on Thursday.
Drug development company Elan made the biggest gains, finishing up almost 6 per cent at €18.18. Early in the day it released encouraging results from a phase two clinical trial of the Alzheimer's drug Bapineuzumab which it is developing with Wyeth.
Elsewhere in Europe all the major exchanges closed in positive territory. The FTSE 100 was up 67.3 to 5861.9, Germany's Dax edged up 66.28 to 6796.2 and the Cac 40 in Paris gained 28.59 points to 4686.3.
Early gains in the US were negated by data released later in the day which showed producer prices were up while new housing starts have dropped again.