Dow sets new five-year high

NEW YORK: The Dow Jones Industrial Average defied the effects of new US spending cuts and pushed to a new five-year high Monday.

At the closing bell, the Dow picked up 38.16 points (0.27 per cent) to 14,127.82, its second highest close ever and less than 40 points from the all-time record set on October 9, 2007.

The broad-based S&P 500 increased 7.00 (0.46 per cent) to 1,525.20, while the tech-heavy Nasdaq Composite Index gained 12.29 (0.39 per cent) to 3,182.03.

The gains came after US budget cuts took effect Friday following the failure of Washington policy makers to agree on a compromise package.

"Yes the sequester has been activated, but it will take time to have effect on the economic data," said Peter Cardillo of Rockwell Global Capital. The markets continue to show much "resilience," he added.

Analysts pointed to remarks from the Federal Reserve's number two official that reaffirmed the Fed's aggressive stimulus policy.

Janet Yellen, vice chairwoman of the Fed board of governors, said in a speech that the Fed intends to "keep monetary policy highly accommodative until well into the recovery."

Yahoo gained 3.5 per cent after earning an upgrade from Barclays, while other big tech stocks were mixed: Apple fell 2.4 per cent, Google added 1.9 per cent and Oracle picked up 1.2 per cent.

Oil-services company Transocean inched 0.1 per cent higher after besting earnings forecasts and reinstating its dividend.

Oil company Hess picked up 3.5 per cent after saying it would exit downstream businesses and focus on exploration and production.

The news lifted leading independent refiners, including Marathon Petroleum Corp. (+5.6 per cent), Phillips 66 (+2.8 per cent) and Valero Energy (+4.0 per cent).

Among retailers, Dow components Walmart and Home Depot picked up 1.9 per cent and 1.8 pe rcent respectively, while Target gained 3.6 per cent.

Shares of bed and mattress maker Select Comfort plunged 15.8 per cent after it said February sales were disappointing and its first quarter performance could miss forecasts. -- AFP