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While you were sleeping: US shifts gears

Tuesday 6th April 2010

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Increasing signs that the world’s biggest economy is shifting gears buoyed investors on Wall Street, while most of the world’s other key markets remained closed for the Easter holiday weekend.

In late trading, the Dow Jones Industrial Average rose 0.36% and the Standard & Poor’s 500 gained 0.67%. The Nasdaq Composite rose 0.95%.

Apple Inc rose 0.8% to US$237.93 after saying it sold more than 300,000 iPads on the device’s first day of availability over the weekend.

Exxon Mobil Corp and Chevron Corp. paced gains in 39 of 40 energy stocks in the S&P 500 as crude oil climbed 2% to a 17-month high of US$86.56 a barrel in New York.

The Chicago Board Options Exchange Volatility Index, or VIX, which is known as Wall Street’s ‘fear gauge’ fell 1.37% to 17.23.

Home sales data helped lift home builders' stocks, with the PHLX housing index up 1.9%. The index was buoyed by shares of PulteGroup Inc, up 2.7% at US$11.42, and Masco Corp, up 2.3% at US$16.17.

The Institute for Supply Management said its service index grew in March for a third straight month, jumping to 55.4, its strongest reading since May 2006. That was up from February's 53.0 reading and above economists' forecasts for 54.0 for March.

A reading above 50 indicates expansion in the sector.

The major European markets were closed for Easter Monday.

The MSCI Asia Pacific Index topped its highest close in more than 19 months, driven by Japan.

The Dollar Index, which measures the greenback against a basket of six major currencies, fell 0.02% to 81.16.

The US dollar last changed hands at 94.14 yen, down 0.5%, after earlier hitting 94.78 yen, a seven-month high. The euro fell 0.5% to 127.11 yen but was down 0.1% against the dollar at US$1.3495.

Other traders said the US dollar was likely to find new resistance around 95.10 yen - which would be a 61.8% retracement of its fall from a high in April 2009 of 101.45 to a 14-year low of 84.82 yen hit in late November.

Market players told Reuters they were also watching moves in the Chinese yuan after US Treasury Secretary Timothy Geithner said on Saturday he will delay an April 15 report on whether China manipulates its currency. Chinese President Hu Jintao is scheduled to visit Washington next week for a nuclear security summit.

The Reuters/Jefferies CRB Index, which tracks 19 raw materials, rose 1.11% to 279.51.

Copper for May delivery advanced as much as 1.4% to US$3.635 a pound in New York, the highest level since August 1, 2008.

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