Tens of thousands of online investors were locked out of the stock market yesterday as two of the country's biggest online share dealing services broke down on one of the busiest trading days so far this year.

The speculative frenzy which gripped the London market during the spring, when the excitement of amateur investors sent internet and other technology-related stocks to stratospheric levels, suddenly returned yesterday, pushing the FTSE 100 index of Britain's top companies to its highest level this year.

But computer failures at Charles Schwab and Barclays Stockbrokers, two of the country's biggest private client brokers, left their online investors unable to deal. Charles Schwab, which usually expects 75% of its trades to be conducted over the internet, failed to relaunch its website by the end of the day at 4.30pm, leaving investors to use the firm's telephone service instead, while Barclays was shut for two hours in the afternoon.

The shutdowns were unconnected and, according to the brokers, unrelated to a huge jump in trading volumes yesterday. Some 154,000 trades went through, compared with August's daily average of 75,000, as the FTSE 100 jumped 123.5 points to 6,795.

This key indicator now stands just 155 points below its all-time high, struck in December last year. The techMARK 100 index of hi-tech and biotech companies jumped more than 3%.

Brokers said the impetus for retail investors to retest the market now appears to have been a sharp improvement in sentiment on the other side of the Altantic, where worries of another rise in interest rates have abated over recent days.

A string of benign economic data from the US, capped by glowing figures on wages and employment yesterday, reinforced the belief that Federal Reserve chairman Alan Greenspan will leave borrowing costs on hold for at least two months while the US presidential race is concluded.

In Britain there is a consensus that interest rates will be left at 6% when the Bank of England's monetary policy committee convenes next week.

Justin Urquhart Stewart, director of Barclays Stockbrokers, said: "Electric Henry, the small punter, is back. All the stocks that are moving are the familar ones."

Typical of the stocks in heavy demand yesterday was Durlacher, the specialist internet investment bank, which jumped 29%. Mr Urquhart Stewart also pointed to pure internet companies such as Affinity and QXL. "It's the usual suspects."

However, the 375p rise in Affinity to £17.50 still leaves the share well short of the £85 peak reached at the height of the internet investment frenzy this year. QXL was up 9.75p to 70p, but is worth just a tenth of its value six months ago.

Brian Winterflood, chairman of Winterflood Securities, which specialises in smaller stocks, said he was "amazed" by the amount of volume going through. "It's almost as if they've got their buying boots back on."

• Signs that the US economy may be slowing helped revive the fortunes of the battered euro yesterday after its pasting on the foreign exchanges on Thursday - which saw it hit an all-time low against the American dollar.

The euro clawed back above 90 cents from its lifetime low of 88.37 late on Thursday after new figures showed that US manufacturers cut output for the first time in 19 months in August, while the number of people in work fell by 105,000, taking the unemployment rate from 4% to 4.1%.

However, most analysts expect the euro's recovery to be short-lived. Peter Luxton at Standard & Poor's MMS said the US data should be seen as benign, despite what the headline figures suggest.