News from AAP

Wall Street closes solidly higher as sentiment rises

Print This Post A A A

US stocks finished solidly higher on Tuesday, with gains in Apple, Google and Intel boosting the tech-rich Nasdaq.

Also helping were gains in Europe’s markets on the back of a surge in German investor sentiment, to a seven-month high, and a successful Spanish debt auction that saw borrowing costs drop sharply.

The Dow Jones Industrial Average rose 78.56 points (0.60 per cent) to 13,248.44, scoring a fifth straight day of gains.

The broad-market S&P 500 added 9.29 (0.65 per cent) at 1,427.84, while the tech-rich Nasdaq Composite leaped 35.34 (1.18 per cent) to 3,022.30.

“The markets were impressive overall,” said Joe Bell of Schaeffer’s Investment Research.

“European markets traded higher ahead of our open, which helped provide a bit of a boost early on.”

The rally also came as the Federal Reserve’s Federal Open Market Committee opened its final policy meeting of the year, with expectations that it will decide to expand bond purchase operations to replace the expiring “Operation Twist” bond swap program.

“It is widely expected that the FOMC will announce a new plan to buy long-term securities after Operation Twist ends. The main difference is that the new purchases (versus those made with ‘Twist’) will be unsterilised. That is, the new plan will carry the moniker of ‘QE4,'” said Patrick O’Hare of Briefing.com.

The FOMC will announce its interest rate decision at 1730 GMT (0430 AEDT on Thursday).

The technology sector outperformed, leading the Nasdaq higher.

Apple, the biggest company by market valuation, gained 2.2 per cent, Google added 1.7 per cent and Intel jumped 2.8 per cent.

Travel website TripAdviser bounced 6.6 per cent after media tycoon John Malone’s Liberty Interactive paid $300 million for a controlling stake, giving a lift to other online travel companies. Expedia was up almost four per cent and Orbitz Worldwide rose 3.0 per cent.

But ticketing giant Priceline fell 0.4 per cent.

Delta Air Lines added 5.1 per cent after announcing the purchase of a 49 per cent stake in Richard Branson’s Virgin Atlantic from Singapore Airlines for $360 million. Branson and his Virgin Atlantic will continue to hold a 51 per cent controlling stake.

Insurer AIG climbed 5.7 per cent to $35.26 after the US Treasury announced the successful sale of its final 234 million shares at an average of $32.50 a share.

Bond prices fell. The 10-year US Treasury yield rose to 1.65 per cent from 1.62 per cent late on Monday, while the 30-year moved to 2.84 per cent from 2.80 per cent.

Bond prices and yields move inversely.