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NEW YORK, US - US 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 stabilise.
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 per cent surge in shares of American Express.
The Nasdaq was powered by a 3.5 per cent jump in shares of Apple 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.
The Dow Jones industrial average shot up 189.87 points, or 1.48 per cent, to 13,010.00. The Standard & Poor's 500 Index surged 23.75 points, or 1.71 per cent, to 1,409.34. The Nasdaq Composite Index climbed 67.91 points, or 2.81 per cent, to 2,480.71.
Apple's stock jumped 3.5 per cent to US$180.00 while RIM shares climbed 5.2 per cent to US$128.00 on the Nasdaq.
Shares of chip maker Intel Corp, a technology bellwether, gained 4.6 per cent at US$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 US cents to settle at US$112.52 a barrel.
Oil's decline and disappointing quarterly results from Exxon Mobil Corp, the biggest name in the US oil sector, sent energy shares down sharply.
Exxon shares dropped 3.6 per cent to US$89.70 on the NYSE. Oil and gas producer Apache Corp's shares slid 6.1 per cent to US$126.41. The S&P index of energy shares dropped 2.2 per cent.
Oil's drop however, was a boon for retailers, which are vulnerable to high petrol prices that deprive consumers of disposable income.
The S&P retail index rose 3 per cent. Shares of department store chain Macy's rose 4 per cent to US$26.30.
Blue-chip financial shares also rose by similar proportions. Citigroup shares climbed 4.2 per cent to US$25.99 and shares of rival Bank of America gained 4.9 per cent to US$39.39. AmEx gained 6.9 per cent to US$51.33, making it the Dow's biggest gainer. -- REUTERS
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