Wall Street keeps climbing on Apple boost

Specialists James Ahrens, left, and Robert Tuccillo work on the floor of the New York Stock Exchange. The success of a Greek debt swap overnight has pushed Wall St up. File photo / AP

Stocks on Wall Street climbed to further highs overnight, lifting the Standard & Poor's 500 to within 10 per cent of its 2007 record, as Apple said it will start paying a dividend and buy back US$10 billion of its shares.

In early afternoon trading in New York, the Dow Jones Industrial Average advanced 0.19 per cent, the Standard & Poor's 500 Index rose 0.52 per cent and the Nasdaq Composite Index climbed 0.86 per cent. That leaves the S&P 500 a mere 10 per cent below the record closing high of 1,565.15 in October 2007.

"Investors have been reluctant to put money to work for awhile, but Apple is giving greater confidence for them to invest in stocks," Rick Meckler, president of investment firm LibertyView Capital Management in New York, told Reuters.

Federal Reserve Bank of New York President William Dudley warned that there are still risks to the economic recovery including rising oil prices and the sluggish rebound in the housing market.

"The incoming data on the US economy has been a bit more upbeat of late, suggesting that the recovery may be getting better established," Dudley said in a speech in Melville, New York. "But, while these developments are certainly encouraging, it is far too soon to conclude that we are out of the woods in terms of generating a strong, sustainable recovery."

His comments helped confirm expectations that the central bank will keep a loose monetary stance.

A case in point was today's report on US homebuilder sentiment which showed that it was unchanged in March, holding at its best level since June 2007. Sentiment in February was revised lower.

The sentiment on Apple only got better after the company said investors will receive a quarterly dividend of US$2.65 a share starting in the period beginning July 1. The company also said it will buy back US$10 billion of its stock, beginning in the fiscal year starting September 30 and taking place over three years. The stock rose 2.3 per cent.

Shares of United Parcel Service also gained, rising 2.7 per cent, after securing an agreement to acquire TNT Express of the Netherlands. The takeover will make UPS the market leader in Europe, according to Reuters.

In Europe, investors took a breather; the Stoxx 600 Index ended the day with a 0.1 per cent dip, following a 2.6 per cent climb last week.

The market is "getting very high, possibly running out of oxygen as it were. Some of the tactical indicators are beginning to look quite weak," Michael O'Sullivan, head of portfolio strategy at Credit Suisse Private Banking, told Bloomberg. "I wouldn't be surprised to see some sort of correction over the next couple of weeks."