By Greg Peel

The Dow closed up 6 points while the S&P added 0.4% to 1409 and the Nasdaq starred with a 0.8% gain.

Apple has become the pin-up success story for Wall Street over the past few years and the stock has risen around 66% this year alone. Aided by excitement over the successful release of the iPad 3 and the announcement of a first ever dividend this year, Apple shares last night closed above US$600 for the first time. Apple is the second biggest stock in the US after Exxon but is yet to be welcomed into the Dow Jones average. It does, however, rather dominate the Nasdaq.

It's all a bit worlds-away for Australia where all we can do is join the queues to buy the products. But indirectly the Australian market should be a beneficiary of Apple euphoria as it is seemingly providing quite a bit of "feel good" on Wall Street at present.

This mood has flowed over into the US financial sector and US bank stocks have surged since the release of the Fed's stress tests. Bank of America shares were powering along again last night when a rumour spread that the bank was considering cashing in on the new-found support by raising some fresh capital. There has been no confirmation but US banks stocks turned around late in the session and helped the Dow to a steady close after it had been up 37 points.

The main focus on Wall Street at present is in the bond market, where the rush to offload low-yielding longer date paper continues. The benchmark ten-year yield rose another 8 basis points last night to 2.38% as two FOMC members questioned the need to maintain a low funds rate for such an extended period. While it is simple to suggest falling bond prices represent switching into stocks, the magnitude of bond selling has not really been matched in the stock market as yet. The suggestion is that many investors are exiting bonds to move first into cash, where a little more watching and waiting is prudent before the stock market becomes the major recipient, if that proves to be the case.

The mood was slightly dampened last night by the release of the monthly US housing market sentiment index. The March reading was flat against the Feb reading which itself had been revised down, albeit that level is still the highest since 2007. The US economy may be looking healthy in many areas but not in housing, and that's something Ben Bernanke has focused clearly on when he has summed up the state of the US economy. The weak housing market provides a good excuse to keep monetary policy loose.

Professor Shiller of Case-Shiller fame suggested last week that US house prices have probably hit bottom. While this might be good news, he added that perhaps bottom is where they will now likely stay for some time. All America has done is wiped out the ridiculous house price premiums that were applied in the great credit binge of the noughties, and returned US house prices to a level of "fair value" on the basis of over-supply and weak demand. It may take a few years of clear economic growth for US house prices to start meaningfully rising again, and perhaps in the meantime the bulldozer would be the best policy tool.

Over in Greece (remember Greece?), the complicated process of auctioning that 15 odd percent of sovereign bonds which was not included in the restructure is underway with first indications suggesting a settlement price of 21.75 cents in the dollar, which would provide all CDS holders with a return of 78.75 cents. This would equate to around US$2.3bn or so and will not upset the world in the grander scheme of things.

Further easing of European fear has seen the euro again supported, such that the US dollar index fell another 0.5% last night to 79.45. The Aussie has thus gained 0.25% to US$1.0607 and gold ticked up a tad to US$1663.40/oz.

Real commodities were quiet last night with base metals barely moving the dial and Brent crude falling US10c to US$125.71/bbl. West Texas did manage to rise US90c to US$107.96/bbl.

The SPI Overnight was up 5 points.

Today sees the release of the minutes of the last RBA meeting which will be closely scrutinised for clues as to whether the central bank would consider cutting rates other than if Europe implodes again. My guess is no. If you're wondering why, see today's upcoming article "LNG and Australia's GDP".

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