US stocks extend rally

US stock index benchmarks rose to the day’s highs late in the New York trading day.

It’s been a bit of a mixed bag in terms of earnings today, with a high profile earnings miss by Wal-Mart dragging the Dow Jones lower earlier in the day, but optimism has flourished across the broader market as the trading day has worn on.

Heading into the last half an hour of trading on Wall Street, the Dow was up 0.72%, with the S&P 500 not far behind with a 0.70% gain, now under 10 points from its all-time high of 1850.84.

Ever since that high was hit back last month, there have been questions about what risks are posed to the US economy by the weakness in emerging markets. Today’s PMI report from Markit, which showed a big surge in manufacturing activity this month, would seem to suggest the US economic recovery remains far from derailed.

Sentiment has also helped been by signs of an increasing appetite for takeovers. Less than a couple of months into the year, we’ve already had four big takeover deals in 2014, the latest being Facebook’s $19 billion purchase of messaging service Whatsapp, while earlier in the week we heard that Actavis is to buy Forest Labs for $21 billion. This raises expectations of further M&A activity and is a sign of how strong US corporate balance sheets are at the moment.

The WhatsApp deal has had investors suddenly re-evaluating whether BlackBerry’s instant messenger platform, with nearly 80 million users at last count, is worth more than previously thought. BlackBerry’s share rose more than 4% in trading today.

Hewlett-Packard and Groupon report after the market closes tonight. 

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