Wall Street Gains As Apple Scales New Peak On IPhone 5
NEW YORK (Reuters) - Stocks rose on Friday as Apple unveiled its latest iPhone worldwide, driving its shares up to a new peak, and Spain appeared to move closer to an anticipated bailout package.
"In a stable full of donkeys, there is one racehorse, and everyone is buying the racehorse," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago, in reference to Apple. "You have - which is something rare in the market these days - a stock that has fundamental value. It's not just a headline. It's not just hope."
Ken Polcari, managing director of ICAP Equities in New York, said the latest developments in Spain also bolstered investors' positive sentiment.
Spain is considering freezing pensions and speeding up a planned rise in the retirement age as it races to cut spending and meet conditions of an expected international sovereign aid package, sources with knowledge of the matter said.
"There is that news out of Europe, where they seem to be making more progress towards helping Spain out, so that is going to continue to kind of support us, for sure," Polcari said.
At midday stocks were slightly off their highs of the day.
The Dow Jones industrial average <.dji> gained 35.60 points, or 0.26 percent, to 13,632.53. The Standard & Poor's 500 Index <.spx> gained 4.60 points, or 0.31 percent, to 1,464.86. The Nasdaq Composite Index <.ixic> gained 15.88 points, or 0.50 percent, to 3,191.84.
Spain's deputy prime minister later denied the government was mulling the freezing of pensions. The German finance minister said the country did not need a sovereign bailout on top of the package already approved for its banks.
The benchmark Standard & Poor's 500 Index <.spx> has gained about 6.2 percent since the start of August, mostly on expectations for new economic stimulus measures from the world's central banks. Last Thursday, the Federal Reserve announced a third round of stimulus or quantitative easing, known as Q3, intended to bolster the economy and reduce U.S. unemployment.
This week, though, the market's action has been muted, with the S&P 500 barely moving 0.4 percent in either direction daily.
There may be increased volatility toward Friday's close because of "quadruple witching," the quarterly settlement and expiration of four different types of September equity futures and options contracts. Expiration can lead to greater volume and volatility as players adjust or exercise their derivative positions.
"The option expiry is going to create this massive volume - as it did on the opening - at the close," Polcari said.
In looking ahead to quarterly earnings, one bright spot came from the fashion front. Shares of Michael Kors Holdings Ltd
Housing shares advanced, led by KB Home
Darden Restaurants Inc
(Editing by Jan Paschal)
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