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US stocks lifted by oil rally, Buffett's Apple stake

May 17 2016 07:16

New York - US stocks pushed firmly higher on Monday after billionaire investor Warren Buffett took a $1bn bite into Apple and oil prices surged to new 2016 peaks.

Asian markets also rose on signs that governments would continue growth-favouring policies, while bourses in Paris and London avoided big swings on a day that Frankfurt was closed due to a bank holiday.

On Wall Street, the broad-based S&P finished up 1.0%. Some analysts said the US market was primed to go higher after falling three weeks in a row.

"The market declined for three consecutive weeks and maybe it reached the point it attracted some buyers," said Bill Lynch, director of investment for Hinsdale Associates.

Apple surged 3.7% following the disclosure of the Buffett stake, which comes about two and a half weeks after another prominent investor, Carl Icahn, said he had exited the US tech giant.

Apple, the world's biggest company by market capitalization, has been under pressure as a result of slowing iPhone sales, threatening its chief revenue and profit source.

Petroleum-linked shares rallied, as oil prices closed at new 2016 highs after Goldman Sachs said the petroleum market was in a short-term supply deficit.

Most retailers also scored handsome gains, with Home Depot and Wal-Mart both advancing 1.7% ahead of earnings releases this week. The sector was battered last week following disappointing results from Macy's and others.

In Europe, London managed to end the day with a gain of 0.2%, pulled up by energy and mining stocks. But Paris dipped 0.2%.

Economic data in China was lacklustre, with industrial production and retail sales rising less in April than they had in March.

However, Shanghai stocks finished 0.8% higher, buoyed by central bank assurances that it would continue with policies to support growth.

Meanwhile Tokyo investors cheered a report Saturday in the Nikkei business daily that Prime Minister Shinzo Abe had told officials he wants to put off a consumption tax hike to avoid damaging the already tottering economy.

The last rise in April 2014 - the nation's first in 17 years - was blamed for stalling a nascent recovery and pushing Japan into a recession from which it has hardly recovered.

Japan's benchmark Nikkei shares index closed 0.3% higher, with a weaker yen also providing support.

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