Wall Street stays strong as Apple keeps surging

Specialists James Ahrens, left, and Robert Tuccillo work on the floor of the New York Stock Exchange. File photo / AP
Specialists James Ahrens, left, and Robert Tuccillo work on the floor of the New York Stock Exchange. File photo / AP

Wall Street held onto gains overnight, helped by another climb in stock market darling Apple, which has advanced for a sixth day.

In early afternoon trading in New York, the Dow Jones Industrial Average rose 0.17 per cent, the Standard & Poor's 500 Index gained 0.13 per cent and the Nasdaq Composite Index advanced 0.17 per cent. The benchmarks have rallied to multi-year highs in recent days.

Europe's Stoxx 600 Index closed with a 0.3 per cent gain for the session.

"We are still not seeing the kind of volume that would suggest this is comprehensively being bought into by all investors," Gordon Charlop, a managing director at Rosenblatt Securities in New York, told Reuters. "But people are able to tolerate more risk now.

"The key takeaway is, can we hold [Tuesday's] gains?"

The US currency received a boost, rising as high as 83.83 yen, the highest level since April 14, and as high as US$1.3011 per euro, the best since February 16.

The appeal of US Treasuries, typically a safe-haven, declined conversely as the economic outlook improved. The yield on the 30-year bond increased 14 basis points to 3.41 per cent, while the yield on the benchmark 10-year note rose 15 basis points to 2.28 per cent.

"In the light of things looking better in the US, the market wants to hold dollars and short Treasuries," Shahab Jalinoos, a senior currency strategist for UBS in Stamford, Connecticut, told Bloomberg. "These kind of yield moves would have made the market buy dollar-yen, but on top of that you have clearly divergent central bank policy with aggressive easing in Japan."

Developed economies will pick up steam this year thanks to an array of ultra-loose monetary policies from major central banks and amid new signs of progress in the euro zone's debt crisis, a series of polls by Reuters found.

The surveys of over 250 economists, taken in the past few days, saw 2012 growth forecasts for the euro zone, Britain and Japan revised up, but left unchanged for the US.

A separate poll by Bloomberg showed that economists expect American GDP will grow at a 2.5 per cent annual rate in the final three months of the year, up from 2 per cent this quarter. The 71 economists were surveyed from March 9 to March 13. For all of 2012, the US may expand 2.2 per cent, up from 1.7 per cent last year.

The US economy is gathering steam that is likely to pace itself.

"I think it's evolving into a self-sustaining expansion," Mark Zandi, chief economist at Moody's Analytics, told Reuters. "I think we're pretty close to off and running, assuming we don't get unlucky or nailed by some unforeseen event."

Also on a sustained course of strength is Apple. The stock climbed 4.1 per cent to US$591.19 after Morgan Stanley and Canaccord Genuity boosted their price targets to above US$700.

Apple's latest iPad tablet is available for pre-orders as of today and will be in stores on Friday. It's expected to be met with strong demand.

"With our checks indicating record pre-orders and 2-3 week wait times for new iPads, we anticipate a record iPad launch this weekend," Canaccord Genuity analysts T Michael Walkley and Matthew Ramsay told Reuters.

- BusinessDesk

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