Elan's 2-year price movement on Nasdaq.

In New York Wednesday, strong payrolls data underpinned investor sentiment and the Federal Reserve announced that it will continue lending to Wall Street.

The Dow Jones Industrial Average, which rose 266 points on Tuesday gained 110 points, or 0.97%, led by a 3.7% rise in component Bank of America, following a climb of 14.8% on Tuesday.

The Nasdaq Composite Index rose 0.45%  and the S&P 500 added 0.78% to 1275.60.

The Federal Reserve said today it is extending its emergency lending to investment banks through January and expanding several other direct-loan programs created since the onset of the credit crisis last August.

The announcement is seen as a recognition of the uncertain conditions in financial markets. Read the full statement.

The private sector group ADP estimates that private sector jobs rose 9,000 in July. The Department of Labor's employment is out on Friday and ADP's record is erratic.

Live US Indices.

In Europe, the Dow Jones 600 rose 1.5% Wednesday and all 18 Western European markets rose with the exception of Ireland and Iceland.

Germany's DAX rose 0.91%; the UK's FTSE 100 gained 1.82% and France's CAC 40 added 1.7%.

In Dublin, Elan plunged 32% after disappointing results of a study of a drug for Alzheimer's disease. The ISEQ fell over 3%.

AIB rose almost 7% following publication of its half-year results.

AIB Bank reports pre-tax profit of €1.28 billion in first-half of 2008

The Wall Street Journal said today that Elan and Wyeth presented complete data from the midstage trial of their experimental drug for Alzheimer's disease on Tuesday in Chicago and said the results support an earlier decision to move it into more-advanced studies before a thorough assessment had been made.

The Journal said in June, the companies announced that their study indicated that bapineuzumab had shown some effectiveness in cleansing the brain of amyloid, a substance that many scientists believe plays a central role in the disease. Although the 234 patients on the whole showed no improvement in dementia symptoms, bapineuzumab did appear to help those who don't carry a gene variant that predisposes a person to Alzheimer's.

The companies then opted to proceed with a Phase III trial -- which can exceed $100 million -- before determining whether the midstage study had clearly demonstrated the drug's utility. That drew questions from inside and outside the scientific world.

Doctors and investors have been eager to hear the complete results for clues as to whether bapineuzumab will be successful in later studies and clear regulatory hurdles. Results aren't expected until around 2010.

Jack Gorman, analyst at Davy commented today:

As advertised, the detailed presentation of the Bapineuzumab Phase II study at ICAD provided as many questions as answers, but these in turn severely jolted the stock in after-hours trading (-32%). As we digest the data, we find it difficult to reconcile the scale of this price response with the new knowledge gained from the presentation and subsequent conference call.

Putting aside the question of how much optimism was factored into the stock, the principal issues that we identified with the Phase II detail were concerned with the strength of the efficacy signals in the post-hoc analyses. These primarily included:

(1) The lack of discernible dose response across the total MITT (modified intent-to-treat) group, ApoE4 carriers or non-carriers. This may be attributable to dropouts at higher dosages or indeed the very small numbers in each dosage cohort.

(2) The possibility that longer duration trials may be considered in the Phase III programme to fully capture the potential disease-modifying effects, especially in the carrier group. This could stretch development timelines.

(3) The strong deterioration in the placebo group for non-carriers (a circa 11 point decline on ADAS-Cog) is at the upper end of experience, thus making it an easy comparison for efficacy purposes.

(4) The removal of one statistical assumption (that of linearity of patient decline) in the results was not expected but we believe tolerable in the context of what is already post-hoc analysis.

The safety profile, on the other hand, was not substantially different from our own expectations. As expected in an aged population, a very sizeable number of patients experienced adverse events. Several occurred at >2x the placebo rate in Bapineuzumab treated patients, but it will take a much larger trial to establish any causative link with the treatment. Vasogenic edema occurred in 12 patients (9.6% treated group, in line with our own view); only one was treated and six actually were subsequently re-dosed at lower levels. There were three deaths in the treated group (two carriers, one non-carrier), but none were deemed to be related to Bapineuzumab.

One must be aware of the risk of treating a small Phase II data with the rigour of a full Phase III analysis. Instead, Phase II is designed to prepare for the rigour of Phase III analysis. The top-down signals remain that the ApoE4 non-carrier group has demonstrated very promising efficacy data without incurring any red flags on safety. The carrier group results remain less clear but may be reset in a larger patient population. This is the basis of the Phase III  design. Slope divergence, itself evidence of disease modification, did occur in non-carriers (ADAS-Cog, NTB, brain volume reduction) in the latter part of the study. We believe the stock will likely remain volatile as the data are digested further.