(Updates to close)
By Jennifer Coogan
NEW YORK, May 1 (Reuters) - U.S. stocks rose on Thursday as
a rebound in the dollar and retreating oil prices calmed fears
about inflation, renewing investors' appetite for riskier
assets, including undervalued technology shares.
The three major indexes closed at the highest level since
the first half of January as equities extended a rally started
in mid-March on optimism that credit markets and the economy
have begun to stabilize.
Investor confidence was on the mend a day after the Federal
Reserve trimmed rates again and hinted at a pause in its recent
campaign to lower borrowing costs. Financial stocks were the
main beneficiaries, led by a nearly 7 percent surge in shares
of American Express <AXP.N>.
The Nasdaq was powered by a 3.5 percent jump in shares of
Apple Inc <AAPL.O> on news it will sell movies on iTunes the
same day they are available on DVD, giving further momentum to
the company's lucrative iPod franchise. For details see
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"Tech is a global sector, exposed to enterprising spending
worldwide, and never have I seen tech this cheap," said David
Bianco, chief U.S. equity strategist at UBS in New York.
"So when you've got some signs of encouragement in the
economy," he added, "I think people are feeling as if they can
take advantage of the value seen in tech."
The Dow Jones industrial average <> shot up 189.87
points, or 1.48 percent, to 13,010.00. The Standard & Poor's
500 Index <.SPX> surged 23.75 points, or 1.71 percent, to
1,409.34. The Nasdaq Composite Index <> climbed 67.91
points, or 2.81 percent, to 2,480.71.
Apple's stock jumped 3.5 percent to $180.00 while RIM
shares climbed 5.2 percent to $128.00 on the Nasdaq.
Shares of chip maker Intel Corp <INTC.O>, a technology
bellwether, gained 4.6 percent at $23.29.
The dollar's rise to a seven-week high against a basket of
major currencies knocked crude oil prices lower. Crude, like
many other commodities, is priced in dollars and becomes
less affordable to overseas buyers when the greenback
strengthens. Crude futures for June fell 94 cents to settle at
$112.52 a barrel.
Oil's decline and disappointing quarterly results from
Exxon Mobil Corp <XOM.N>, the biggest name in the U.S. oil
sector, sent energy shares down sharply.
Exxon shares dropped 3.6 percent to $89.70 on the NYSE. Oil
and gas producer Apache Corp's <APA.N> shares slid 6.1 percent
to $126.41. The S&P index of energy shares <.GSPE> dropped 2.2
percent.
Oil's drop however, was a boon for retailers, which are
vulnerable to high gas prices that deprive consumers of
disposable income.
The S&P retail index <.RLX> rose 3 percent. Shares of
department store chain Macy's Inc <M.N> rose 4 percent to
$26.30.
Blue-chip financial shares also rose by similar
proportions. Citigroup shares climbed 4.2 percent to $25.99 and
shares of rival Bank of America <BAC.N> gained 4.9 percent to
$39.39. AmEx gained 6.9 percent to $51.33, making it the Dow's
biggest gainer.
(Editing by Jan Paschal)
