The 6-foot-tall bronze depicts a wiry man in mid-stride, his right foot jutting forward, his head erect and and his arms hanging at his side. Giacometti, a modern master known for his haunting sculptures of blank-faced Everymen, cast the work 60 years ago as part of a commission to plant several of his bronze figures on Chase Manhattan Bank's Pine Street plaza in New York City. The artist famously struggled with the project, eventually quitting it but casting stand-alone versions of several of the planned figures, including "Walking Man I."

The price breaks the existing $104.2 million auction record, set six years ago at Sotheby's, for Pablo Picasso's 1906 portrait "Boy With a Pipe," whose buyer remains unknown.

The U.S. art market appears to be on the mend. The major fall art auctions may not have sold everything on offer, but collectors showed a renewed willingness to bid up top examples of artists' work. Dealers also said inflation fears and expectations of higher bonuses in the financial markets stoked strong bidding.

New York's two chief auction houses, Sotheby's and Christie's International, brought in about $596 million combined from their semi annual sales of Impressionist, modern and contemporary art in the past two weeks. The total surpassed the houses' $409 million spring sales in May, a gain that could signal a measure of returning confidence in high-end art values.

The mood among collectors grew increasingly upbeat as the two weeks of sales progressed. At Sotheby's contemporary art sale Wednesday night, a Warhol silkscreen sold for $43.7 million, more than triple its high estimate. At a lively sale of modern and Impressionist art the week before at Sotheby's, an Alberto Giacometti sculpture sold for $19.3 million, well over its $12 million high estimate.

At Christie's, the results were more modest. The house fell short of presale estimates at its Impressionist sale and modern art evening sale Nov. 3, but it performed solidly at Tuesday's post-war and contemporary auction, led by a Peter Doig painting that sold for $10.1 million.

Auction houses have been struggling to secure enough top material to entice bidders, as the economic downturn forces them to rely heavily on individuals selling art for personal reasons.

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The company has seen its credit ratings downgraded to junk status amid concerns about near-term covenant violations and a decline in the world-wide art-auction market. In June, Sotheby's struck a deal that would lower the borrowing limit on its credit line by $100 million but raise the interest rate it pays on its borrowings. The company also said it is in discussions about a new credit line with an expiration date beyond September 2010 to replace its existing facility.

The $61.4 million total was about a quarter of the tally of a year ago and well below the auction house's low estimate of $81.5 million. Picasso's robin-egg blue portrait of the artist's daughter and a bronze cat by Swiss sculptor Giacometti had each been estimated to fetch up to $24 million.

"They took a big hit in terms of credibility by not selling those two pieces," said Andrea Crane of Gagosian Gallery. "Those estimates were way too aggressive." A packed crowd couldn't mask the mood. Yawns and raised eyebrows littered the suited and Louboutin-shod spectators, as Sotheby's had its smallest tally for the category since the $33.1 million two months after the Sept. 11 terrorist attacks.

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The Picasso was offered by William Achenbaum, a New York real-estate developer and chairman of Gansevoort Hotel Group, according to a dealer with knowledge of the collector’s holdings, who declined to be named. Achenbaum was an investor with Bernard Madoff’s $65 billion Ponzi scheme, according to a filing in the U.S. Bankruptcy Court.

Art historian Werner Spies described the portrait as "the most impressive Picasso ever devoted to a single child". Like many of his favourite portraits of family members, the piece remained in Picasso's personal collection for 35 years until his death in 1973. Following this, it has been in a private collection since the 1980s.

The painting has never been offered at auction before and the Sotheby's exhibition is its first public showing in London. Emmanuel Di-Donna, Vice Chairman of Impressionist & Modern Art Worldwide said: "This life-affirming portrait reflects the great joy that Maya brought into the artist's life, even on the eve of the Second World War."

Bidding was strong in the "Eight Treasures" sale, with the European-sourced collection of imperial porcelain fired in the kilns of Jingdezhen, completely sold off.

In particular, a pear-shaped reticulated celadon vase, with the seal mark of the Qing dynasty Qianlong period, sold for $HK47.7 million ($6.1 million), a world auction record for Qing Monochrome porcelain according to Sotheby's.

"For that sale I think the prices were strong ... and prices were totally on a par with what you'd expect from about a year ago," said Nicolas Chow, the head of Chinese ceramics and works of art at Sotheby's.

"This stone certainly ranks among the most important blue diamonds that I have had the privilege of offering for sale in my career at Sotheby's and what makes it particularly special for us, is that we've been able to follow its production from the initial rough state through the various stages of its cutting and polishing," said David Bennett, chairman of Europe & the Middle East, Sotheby's International Jewellery department.

Mr. Nicolas Chow, Sotheby's International Head of Chinese Ceramics and Works of Art, commented "This magnificent box represents one of the most precious and certainly rarest Tang dynasty artefacts that have ever come on the market. There is no other institution in the world that holds Tang dynasty heirloom pieces apart from the Shosoin in Nara and the present box deserves a place in one of the world’s greatest museums or private collections."

The tortoiseshell box is an object of the utmost luxury, of outstanding craftsmanship and elegance which embodies the mature style of the 'High Tang' period of the mid-8th century. It is a testimony to the exquisite taste and a reflection of the pleasures of imperial life at one of the most glorious moments in Chinese history, when the Tang (AD 618-907) was at the height of their power and in the centre of the international spotlight.

The yellow 19th century villa 30 miles from Milan was, for 20 years, Versace's favourite house and weekend retreat as well as the scene of glamorous weekend parties attended by guests including Diana, Princess of Wales, Madonna, Sting and Elton John.

Sotheby's is auctioning off 550 lots from Villa Fontanelle, including huge classical statues of naked wrestlers, furniture and paintings, expected to fetch more than £2 million in total.

The auction house has recreated highlights of certain rooms of the villa in its New Bond Street galleries to capture Versace's eye for beauty and careful arrangement.

Mario Tavella of Sotheby's said: "It is a great pleasure to orchestrate this remarkable sale of such a maverick of style whose taste and influence is epitomised in the Villa Fontanelle collection."

Bidding will start at $5 million, says Howard-Sneyd, who has already fielded inquiries from private clients in India and the Middle East interested in the piece.

Crafted in the 1860s as a gift for the tomb of the Prophet Mohammad in Medina, Saudi Arabia, the carpet was created under the auspices of Gaekwar Kande Rao, the maharajah of Baroda, a former kingdom in northwest India that is now part of Gujarat state. It took five years of labor by hundreds of craftsmen. Some 2 million seed pearls and colored glass beads and gems set in a gold foil background make up the swirling rosette design.