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Stocks Close Mostly Higher On Upbeat Apple News - U.S. Commentary

Stocks moved mostly higher over the course of the trading day on Monday, extending the strong upward move seen last week. The markets continued to benefit from optimism about the economic outlook as well as some upbeat corporate news.

The major averages ended the day well off their highs for the session but closed in positive territory. The Dow edged up 6.51 points or 0.1 percent to 13,239.13, the Nasdaq climbed 23.06 points or 0.8 percent to 3,078.32 and the S&P 500 rose 5.58 points or 0.4 percent to 1,409.85.

The strength on Wall Street was partly due to positive sentiment generated by tech giant Apple's (AAPL) announcement of plans to initiate a dividend and a share repurchase program.

Apple said it plans to initiate a quarterly dividend of $2.65 per share sometime in the fourth quarter of fiscal 2012. The company's board also authorized a $10 billion share repurchase program commencing in fiscal 2013.

Shares of Apple rose by 2.7 percent on the news, with the iPod and iPhone maker climbing to a new record closing high above $600 a share.

UPS (UPS) also turned in a strong performance on the day after the delivery giant announced that it has agreed to acquire TNT Express N.V. for 9.50 euros per share. The transaction values TNT Express at approximately 5.16 billion euros, or $6.8 billion.

The transaction, which would be the largest ever by UPS in its history, would give UPS an even greater advantage over its rival FedEx (FDX) in Europe. Shares of UPS ended the day up by 3.4 percent.

Meanwhile, traders largely shrugged off the release of a report from the National Association of Home Builders showing that its homebuilder confidence index unexpectedly came in unchanged in March.

The report showed that the NAHB/Wells Fargo Housing Market Index came in at 28 in March, unchanged from the downwardly revised reading for February. Economists had expected the index to edge up to 30 from the 29 originally reported for the previous month.

While the index came in below economist estimates, it is still holding at its best level since a matching reading in June of 2007.

Sector News

Networking stocks saw considerable strength on the day, driving the NYSE Arca Networking Index up by 1.4 percent. Emulex (ELX) and Adtran (ADTN) turned in two of the sector's best performances, advancing by 3.3 percent and 2.8 percent, respectively.

Significant strength was also visible among steel stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Steel Index. The gain extended a recent upward move by the index, which reached its best closing level in over a month.

Brokerage, airline, and internet stocks also showed strong moves to the upside on the day, while gold and railroad stocks moved modestly lower.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Monday. Japan's Nikkei 225 Index edged up by 0.1 percent, while Hong Kong's Hang Seng Index ended the day down by 1 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index slid by 0.5 percent, the German DAX Index and the U.K.'s FTSE 100 Index both edged down by 0.1 percent.

In the bond market, treasuries saw considerable weakness, extending a recent downward move. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 8.1 basis points to a four-month closing high of 2.379 percent.

Looking Ahead

Additional housing data may attract some attention on Tuesday, with the Commerce Department due to release its report on housing starts in the month of February.

by RTTNews Staff Writer

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