Wall St rallies as inflation fears ebb; Apple hits record high

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NEW YORK (REUTERS) - The three major US stock indexes rose more than 1 per cent on Friday (May 4) after weaker-than-expected US wage growth helped to calm investor fears about rising interest rates and inflation, though the S&P 500 and Dow Industrials still posted losses for the week.

Apple provided the biggest boost as it jumped to a record high of US$184.25 during the session after Warren Buffett's Berkshire Hathaway disclosed that it had raised its stake in the iPhone maker.

Apple shares ended Friday's session up 3.9 per cent at US$183.83. The company's stock surged to its greatest weekly percentage gain since October 2011.

At the market open, US stocks had fallen after the Labour Department reported the US unemployment rate dropped to near a 17-and-a-half-year low of 3.9 per cent.

The S&P 500 bounced off its 200-day moving average, a technical level that indicates the long-term trend.

US stocks climbed as the session progressed. Investors said that the low unemployment figure, which on its own might point to inflationary pressure on wages, was countered by April's mere 0.1-per cent rise in wages, which was below expectations.

"It's a rather happy circumstance we find ourselves in,"said Jamie Cox, managing partner for Harris Financial Group in Richmond, Virginia.

"Everyone has a job who wants one, and we don't have the negative piece of it, which is the inflation piece."

The Dow Jones Industrial Average rose 332.36 points, or 1.39 per cent, to 24,262.51, the S&P 500 gained 33.69 points, or 1.28 per cent, to 2,663.42 and the Nasdaq Composite added 121.47 points, or 1.71 per cent, to 7,209.62.

For the week, the Dow lost 0.2 per cent and the S&P fell 0.24 per cent. It was the second straight week of losses for both indexes.

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By contrast, the Nasdaq gained 1.26 per cent on the strength of tech stocks' rally on Friday. The S&P 500 technology sector rose 2 per cent.

All the 11 major S&P sectors were higher, and 29 of the 30 Dow members were in the black, with Chevron Corp the lone exception.

Pandora Media Inc shares jumped 19.8 per cent after the music-streaming service provider reported a smaller-than-expected quarterly loss.

Shares of CBS Corp rose 9.1 per cent after the media company topped revenue and profit estimates for the first quarter.

Fluor Corp shares sank 22.4 per cent, the most on the S&P, after the engineering and construction company posted a surprise quarterly loss due to issues with a gas-fired power project.

Advancing issues outnumbered declining ones on the NYSE by a 3.00-to-1 ratio; on Nasdaq, a 2.77-to-1 ratio favoired advancers.

The S&P 500 posted 16 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 94 new highs and 47 new lows.

Volume on US exchanges was 6.37 billion shares, compared to the 6.57 billion average for the full session over the last 20 trading days.

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