Wall St rallies and Apple approaches US$1 trillion value

VIDEO: REUTERS

NEW YORK (REUTERS) - Wall Street jumped on Thursday (May 10), and Apple inched closer to a US$1 trillion (S$1.3 trillion) stock market value, as tepid inflation data eased worries of faster US interest rate hikes this year.

Fuelled by a US$100 billion buyback plan unveiled last week, Apple rose 1.43 per cent to a record high close of US$190.04, lifting the S&P 500 more than any other stock. The iPhone maker is about 7 per cent away from becoming the first company ever to have a market capitalisation of US$1 trillion.

The US Labour Department's consumer price index increased 0.2 per cent in April, less than economists' expectations, as rising costs for gasoline and rental accommodation were tempered by a moderation in healthcare prices.

Core CPI, which excludes food and energy components, edged up 0.1 per cent in April, slower than the previous two months, and did little to alter traders' expectations of a June rate hike.

A higher inflation number could have increased fears of more aggressive interest rate hikes by the US Federal Reserve.

"The CPI came in at a level where it's not so alarming as far as what the Fed is thinking," said Mark Kepner, an equity trader at Themis Trading in Chatham, New Jersey. "There's comfort that the Fed won't have to move too quickly."

The US stock market rallied broadly, with all 11 major S&P sectors posting gains.

With investors setting aside concerns about a trade war with China, the S&P 500 has risen 3.55 per cent in the past week, its strongest five-session showing since February. The S&P 500 reclaimed its 100-day moving average for the first time since April 19, suggesting to some traders that the market may move higher.

The Dow Jones Industrial Average rallied 0.8 per cent to end at 24,739.53 points, while the S&P 500 gained 0.94 per cent to 2,723.07, its highest level since mid-March.

The Nasdaq Composite added 0.89 per cent to 7,404.98.

CenturyLink gained 7.54 per cent after its first-quarter report. That helped the telecoms sector jump 1.9 per cent, more than any other sector.

AXA Equitable Holdings, the US division of French insurer AXA, rose 1.7 per cent in its market debut. Although its offering raised less than targeted, it was still the biggest US IPO this year.

The top losers on the S&P 500 included Victoria's Secret owner L Brands, which fell 7.15 per cent, and Booking Holdings, formerly called Priceline, which dropped 4.74 per cent. Both companies gave disappointing outlooks.

Advancing issues outnumbered declining ones on the NYSE by a 2.57-to-1 ratio; on Nasdaq, a 1.65-to-1 ratio favoured advancers.

The S&P 500 posted 37 new 52-week highs and two new lows; the Nasdaq Composite recorded 165 new highs and 36 new lows.

Volume on US exchanges was 6.7 billion shares, compared with the 6.6 billion-share average over the last 20 trading days.