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US mkts scale new multi-year highs to close moderately up

The Nasdaq Composite ended at 2,831.58, up 6.02 points or 0.21% and the S&P 500 Index gained 4.11 points or 0.31%, to close at 1,340.43.

February 18, 2011 / 09:08 AM IST

The US markets scaled new multi-year highs amid light volumes to close moderately higher.

The Dow Jones Industrial Average rose 29.97 points or 0.24%, to close at 12,318.14. The Nasdaq Composite ended at 2,831.58, up 6.02 points or 0.21% and the S&P 500 Index gained 4.11 points or 0.31%, to close at 1,340.43.

In the economic data, the Philadelphia Federal Reserve Index rose to its highest level since January 2004 at 35.9 as compared to 19.3 last month.

The seasonally adjusted consumer-price index for January increased by 0.4% from the previous month, while the Core CPI, which excludes volatile food and energy prices, rose 0.2%

Initial claims for unemployment superceded expectations & went up by 25,000 to stand at 410,000 versus 383,000 the previous week.

The index of leading economic indicators saw growth slowing to 0.1% in January versus 0.8% in December. A sharp downward swing in building permit volume accounted for the fall in the index.

Tim Courtney, Investment Management Analyst said, "The earnings of the companies continue to be very strong. I think we are on schedule to break previous records over the next 4 quarter pretty handily. So as long as the earnings continue to come in good I think about 75% of those companies that have reported in the S&P 500 have beaten their expectations and so that's allowing the stock prices to continue to move up. But still remain cheap like you said on price to earnings basis and especially up against other alternatives like bonds and although the bonds rates and other interest rates have been coming up, they haven't come near the attractiveness of the stocks right now."

European markets hovered near a twenty nine months closing high. Strong US manufacturing data helped offset the impact of higher inflation and weekly jobless claims. Indices closed flat.

The dollar struggled on worries about the impact of rising West Asian tension. The decline in US treasury yields further pressured the greenback.

Crude prices meanwhile witnessed a sharp rise in prices on rising popular unrest in Bahrain, Libya and Yemen. The dollar's broad decline also helped support dollar-denominated oil prices.

Meanwhile gold surged to a one-month high as rising consumer prices boosted investor demand for an inflation hedge. Silver touched a 30-year high.

first published: Feb 18, 2011 08:00 am

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