Boosted by billionaire Warrant Buffett's positive comments on equity market, US stocks rallied Monday, bringing the Dow Jones Industrial Average Index to its second highest closing level on record.
The Dow rose 38.16, or 0.27 percent, to 14,127.82, which was less than 50, or 0.26 percent, to its all-time closing high of 14,164.53 set on Oct. 9, 2007.
Meanwhile, the S&P 500 Index edged up 7.00, or 0.46 percent, to 1,525.20. The Nasdaq Composite Index was up 12.29, or 0.39 percent, to 3,182.03.
The equity market opened lower, weighed down by a slump of the Chinese stock market over the government's tighter policies to cool soaring real estate prices.
Moreover, a lack of progress in the US sequestration negotiations between the bipartisan lawmakers of the Congress as well as news that the Italian election impasse might lead to another election added pressures to the market.
The sequester cuts took effect on Friday midnight, but the Democrats and the Republicans are still not expected to make any compromise to solve the budget problems. On top of that, the government will face a shutdown if it could not introduce a new bill to extend a soon-to-be-expired funding program before March 27.
However, the major stock indices bounced back to the positive territory on Warren Buffett's promising outlook for the still profitable equity market.
Buffett, the chairman and CEO of Berkshire Hathaway Inc., said on CNBC that his company is buying stocks, as he believed they were still at "good value" despite the recent rally, noting that the equity market could yield more returns than other investment.
Furthermore, Federal Reserve Vice Chairwoman Janet Yellen's defense for Fed's quantitative easing in a conference Monday added optimistic mood to the market.
"Overall, Yellen's remarks didn't materially alter the dialogue concerning monetary policy," Michael Feroli, a J.P. Morgan Chase economist, said in an email to Xinhua.
"Given her (Yellen's) influence on the Committee, her vocal support of a steady-as-she-goes policy setting is consistent with no change to the Fed's asset purchase program at the March FOMC (Federal Open Market Committee) meeting," Feroli said.
The Federal Reserve is scheduled to release its Beige Book Wednesday. The book is released roughly two weeks before the FOMC's monetary policy meeting.
On individual companies, Apple's shares rose 2.4 percent to close at 420.05 dollars after touching a new 52-week low of 419.00 dollars during the session. Last Friday, a federal judge slashed Samsung's 1.05 billion dollars fine stemming from a patent dispute with Apple.
Shares of Google gained 1.90 percent to close at 821.50 dollars after hitting a fresh all-time high of 822.84 dollars in intraday trading.
Shares of Yahoo jumped 3.46 percent to 22.70 dollars after an analyst at Barclays upgraded the company to overweight from equal weight.
On other markets, crude prices stumbled to a multi-week low. Light, sweet crude for April delivery lost 0.61 percent to settle at 90.12 dollars a barrel on the New York Mercantile Exchange.
Meanwhile, the US dollar weakened slightly against major currencies and the euro/dollar rate fluctuated at low levels on concerns over Italy's election and gloomy economic outlook in the euro zone.
In late New York trading, the euro rose moderately to 1.3024 dollars from 1.3018 dollars of the previous session and the British pound climbed to 1.5112 dollars from 1.5019 dollars.