NEW YORK (Reuters) – U.S. stocks extended gains on Thursday after trade data showed record U.S. exports, easing concerns about a stalled economic recovery following a six-day slide that left the equities market oversold.

Various economists said the spike in exports in April could prompt upward revisions of gross domestic product growth in the second quarter.

“You’re seeing exports picking up pretty dramatically, a positive data point, and a market that had gone down six days in a row,” said Eric Kuby, chief investment officer of North Star Investment Management Corp in Chicago, in reference to the report showing narrower U.S. trade deficit for April.

“You finally have a day with a reason for people to start buying stocks again. The appetite has come back.”

The S&P 500 fell the last six days and was down more than 6 percent from a peak in early May, while the Nasdaq Composite had nearly erased its gains for the year so far.

“For a while, people have been waiting for an entry point,” Kuby said. “Some market participants are saying, ‘We’ve got this pullback. Let’s get invested.’”

The link to the Japanese earthquake in the trade data, which showed a drop in imports from Japan, also backs up widespread opinion that the economy’s recent soft patch is only temporary and not pointing to a dip back into recession in the United States.

S&P sectors most linked to a growing economy led the market higher, with a materials index (.GSPM) up 2.1 percent and an energy index (.GSPE) up 1.3 percent. The Morgan Stanley cyclical index (.CYC), which is down more than 5 percent in June, rose 1.2 percent on Thursday.

The Dow Jones industrial average (.DJI) gained 118.63 points, or 0.98 percent, to 12,167.57. The Standard & Poor’s 500 Index (.SPX) added 12.64 points, or 0.99 percent, to 1,292.20. The Nasdaq Composite Index (.IXIC) rose 15.41 points, or 0.58 percent, to 2,690.79.

The mood remained fragile despite the rebound, with some analysts still expecting the S&P 500 to retest its March low after a string of data, including the latest payrolls report, provided little room for optimism.

“A test of 1,250 is pretty likely in the next couple of weeks,” said John Canally, an investment strategist and economist for LPL Financial in Boston. “We do think it’s going to hold, unless we get another round of bad news from Europe. Data from May is going to look weak, but earnings estimates are still relatively unchanged.”

The PHLX semiconductor index (.SOX) bounced off its 200-day moving average and was holding above 410, a key level that gave strong support in March. It was up 0.6 percent on Thursday.

“It’s telling you that these supply-chain disruptions in Japan may be ebbing, and once that happens, business can tick up again,” LPL’s Canally said. “Demand is still out there. Consumers just couldn’t get what they wanted.”

Texas Instruments Inc (TXN.N) shares rose 1 percent to $32.99 even after the company cut its earnings and revenue forecasts late on Wednesday. The company blamed the shortfall on major client Nokia’s ailing cellphone business.

Reflecting the appetite for tech stocks, shares of Fusion-io (FIO.N) surged 21.6 percent to $23.10 in their first day of trading — up from an initial public offering price of $19. Earlier, the stock was up as much as 34.2 percent at a session high of $25.50. The Salt Lake City, Utah-based company makes storage memory hardware and software for data centers.

But shares of China-based Taomee Holdings Ltd (TAOM.N) fell 4.8 percent to $8.57 in their stock market debut as U.S.-listed Chinese companies come under more scrutiny following a series of accounting scandals. U.S. regulators, brokers and investors are sharpening their look at Chinese companies.

Details of Thursday’s economic data showed the U.S. trade deficit narrowed unexpectedly in April as U.S. exports rose to a record and imports from Japan tumbled more than 25 percent.

A separate report showed the number of Americans filing new claims for unemployment benefits rose by 1,000 last week, while continued claims fell more than expected.

(Reporting by Rodrigo Campos; Additional reporting by Clare Baldwin; Editing by Jan Paschal)

(This story is corrected in the 10th paragraph to say the low referenced is from March 2011, not 2010)

DAEGU, South Korea (Reuters) – Billionaire investor Warren Buffett believes Japan’s devastating earthquake is the kind of extraordinary event that creates a buying opportunity for shares in Japanese companies.

Japan, the world’s third-largest economy, has been battling to bring an overheating nuclear plant under control after it was battered by the March 11 earthquake and tsunami that rattled global markets and prompted massive intervention in currency markets by the Group of Seven industrial nations.

“It will take some time to rebuild, but it will not change the economic future of Japan,” Buffett said on Monday on a visit to a South Korean factory run by a company owned by one of his funds. “If I owned Japanese stocks, I would certainly not be selling them.

“Frequently, something out of the blue like this, an extraordinary event, really creates a buying opportunity. I have seen that happen in the United States, I have seen that happen around the world. I don’t think Japan will be an exception,” said the 80-year-old investor, dubbed the “Sage of Omaha” for his successful long-term investment strategy.

Buffett heads Berkshire Hathaway Inc, which has substantial insurance and utility investments globally.

Japan’s Nikkei share average rose 2.7 percent on Friday, buoyed by the G7 support, but still ended the week down around 10 percent, with some $350 billion wiped off share values — the market’s biggest weekly slide since the global financial crisis in 2008. Japanese markets were closed on Monday.

Buffett said Berkshire Hathaway, which at the year-end was sitting on $38 billion of cash equivalent and last week bought U.S. specialty chemicals maker Lubrizol for $9 billion, was looking for more large-scale acquisitions anywhere in the world.

In his annual letter to Berkshire Hathaway shareholders last month, Buffett had said he was looking for more acquisitions.

“The United States is most likely where we will do something,” he said at a ground-breaking ceremony for a South Korean factory run by a unit of an Israeli firm owned by his investment vehicle.

Buffett will have yet more money to invest after Goldman Sachs buys back $5 billion of its preferred stock from Berkshire Hathaway, which the fund bought at the height of the global financial crisis.

EYE ON KOREA

Buffett, ranked the world’s third-richest man by Forbes this year, said he was also looking to buy entire businesses and large-cap shares in South Korea — where Berkshire is already a leading shareholder in steelmaker POSCO.

He said geopolitical risks associated with North Korea had not curbed his interest in South Korea, Asia’s fourth-largest economy. Berkshire also owns a stake in Chinese car and battery maker BYD.

Buffett did not disclose any holdings in Japan on Monday, and Berkshire Hathaway’s annual report did not show any major investments there. He had been due to visit Japan later this week, but canceled due to the earthquake.

Unlike many foreign fund managers, Buffett, who arrived in the southeastern city of Daegu on Sunday by private jet, won plaudits from ordinary South Koreans.

Sporting gray sweat pants and running shoes, Buffett was greeted by signs reading “Mr Buffett: Daegu Loves You.”

Many in this country of nearly 50 million people have bad memories of the 1998 Asian financial crisis when a deal with the International Monetary Fund bailed out the country but at the cost of tens of thousands of jobs.

Some U.S. hedge funds have been branded “vultures” for buying South Korean assets on the cheap in the wake of that crisis.

“It’s a once in a life-time opportunity. I’m honored to meet such a respected businessman,” said Seo Hyun-joo, a housewife wearing Korean traditional dress.

Buffett later meets South Korean President Lee Myung-bak in Seoul and heads to India on Tuesday to launch his firm’s insurance selling portal.

(Reporting by Hyunjoo Jin; Editing by David Chance and Ian Geoghegan)

NEW YORK – The news last week that Apple’s Steve Jobs is taking a leave of absence was a big story. But something else about the company got far less attention and could be even more important to investors this year.

Corporations “are adding iPads to their approved device list at an amazing rate,” Peter Oppenheimer, Apple Inc.’s chief financial officer, told analysts Tuesday. Apple’s products, more known for their consumer appeal, are now used in by employees of Wells Fargo, Archer Daniels Midland, DuPont and others.

Splurging on $500 iPads is a sign that the business cycle is starting to turn and that companies are starting to spend a record amount of cash they’ve accumulated. If the trend is real, companies will do what consumers haven’t — spark a strong economic recovery. That could push the Standard & Poor’s 500 index to its third straight year of double-digit percentage gains. The last time that happened: the tech-boom days of the late 1990s.

“”You’re going to see a bigger commitment to growth this year because companies have underspent for quite some time,” says Bill Stone, chief investment strategist at PNC Asset Management.

Financial, technology and energy companies are the most likely to benefit from business spending, says David Bianco, a market strategist at Bank of America. Each group is up about 3 percent this year, nearly one percentage point ahead of the overall S&P 500. Those three groups account for nearly half of index’s value.

The continued success of financial, energy and technology stocks would point to a new stage of this bull market, which has returned nearly 100 percent since it began in March 2009. Consumer discretionary stocks, the group of hotels, retail stores and automakers that depend on consumer spending, outperformed the last two years after being left for dead during the 2008 financial crisis. Those companies are now lagging the market, suggesting that the bounce back from the lows of the recession is over.

“Consumers don’t have the income growth to sustain a more rapid pace of spending,” says Jeffrey Kleintop, a market strategist at LPL Financial. Instead, he says, businesses spending will eventually lead to a pickup in the jobs market.

Corporate spending on technology helped IBM Corp. beat analyst expectations last week. On Tuesday, IBM said that its 7 percent jump in revenue came in part from companies in the U.S. upgrading their computer systems. Its stock jumped almost 4 percent last week.

Energy companies, meanwhile, are leading the market this year with a 3.4 percent jump because of higher demand, a sign of an improving economy. Oil company Schlumberger said Friday profit in the most recent quarter rose 31 percent. And financial companies are benefiting from loans to businesses, a signal that those companies plan to expand. JPMorgan said on its earnings call last week that it added 400 middle-market companies as new commercial loan customers. Bank of America said Friday that demand for business loans stabilized last quarter, while US Bancorp said Wednesday that all of its commercial loans divisions were improving, with the exception of real estate.

Financial companies have the added benefit of being cheap. The price-to-earnings ratio of the financial companies in the S&P 500 index averages 11.6, about half of its historical average. Financial companies are cheaper than any other group except for health care, which costs 11.2 times earnings. Even utilities companies, whose slow growth rates typically make them the lowest priced group in the market, are trading at 13.6 times earnings.

Is it too early to make a prediction that the biggest sectors of the market will continue to do well? After all, investor sentiment is at a level not seen since the market hit its all-time in 2007. That makes some contrarian investors nervous.

The market should continue to rise if history repeats itself. Since 1970, the top performing industry groups in January have gone on to outperform the rest of the S&P index over the rest of the year nearly 75 percent of the time.

LONDON (AFP) – The euro rose on Friday and stock markets firmed in response to massive purchases of eurozone debt by the ECB which pushed down borrowing rates for weak eurozone countries facing crisis.

Investors were on edge before the publication of crucial US economic data.

But a key factor in the markets was evidence on the bond market that the European Central Bank has ramped up purchases of debt issued by countries in trouble, mainly Ireland and Portugal.

The euro advanced to 1.3255 dollars in early trading here, from 1.3220 dollars late on Thursday in New York.

Yields on bonds issued by eurozone countries under strain, notably Portugal and Ireland, eased.

London’s FTSE 100 stock index gained 0.05 percent, the German DAX 30 added just 0.02 percent and in Paris the CAC 40 climbed 0.53 percent.

The European Central Bank (ECB) had decided on Thursday to extend its exceptional bond-buying and liquidity-boosting operations to fight the debt crisis which has driven Greece and Ireland into rescues and threatens Portugal and Spain.

“It’s a risk-on morning during the European session,” said Forex.com analyst Kathleen Brooks, suggesting that investors were becoming more willing to buy assets that are deemed to carry higher risk — like equities and the euro.

“The markets initially stuttered yesterday afternoon after ECB President (Jean-Claude) Trichet failed to firmly commit to provide policy support to the troubled peripheral nations during his monthly press conference.”

The European Union and International Monetary Fund have already agreed to bail out Ireland and Greece with billions of euros, but markets suspect that Portugal and Spain could be next in line.

Brooks added: “Trichet clearly stated the ECB was not embarking on a period of quantitative easing.

“However, he did extend lending facilities at the one-week, one-month and three-month timeframes at fixed interest rates — and said that its bond-buying programme would be ‘commensurate’ with market conditions.”

“He also stated the need for governments within the eurozone to keep their fiscal houses in order, which suggested a reluctance on the part of the ECB to step in and directly prop up the troubled peripheral economies.”

Trichet said on Friday: “I think that we have to see that we have a currency that is credible.”

He told RTL radio in France: “There is no crisis for the euro as a currency.

“We have problems of financial instability that are the result of budget crises in certain European countries.”

At Morgan Stanley bank, analysts commented that the ECB wanted to see “a major step-change in the economic governance of the euro area up to and including a fiscal federation before considering any policy action.”

They said that the ECB’s decision on Thursday on extending bond-buying had been reached by consensus but was not unanimous.

The analysts commented that investors should not become unduly optimistic. “The financial crisis needs to be resolved by governments … The ECB can only be a temporary lender of last resort.”

Later on Friday, investors will switch attention to the all-important non-farm payrolls data in the United States.

“Equity market sentiment remains positive and today’s focus is the US jobs report where the expectation is for a further gain in private sector employment,” said VTB Capital economist Neil MacKinnon.

Most Asian stocks mostly extended gains Friday from the previous day as a fresh batch of US economic figures added to the impression that recovery in the world’s biggest economy is on track.

Sydney added 0.38 percent, Tokyo rose 0.10 percent and Seoul picked up 0.36 percent, while Hong Kong fell 0.55 percent and Shanghai eased 0.04 percent.

Comments from Beijing that the government would tighten monetary policy in 2011 suggested interest rate hikes are likely as the country battles inflation.

Dealers were given a strong cue by Wall Street, where the Dow rose 0.95 percent, the S&P 500 advanced 1.28 percent and the Nasdaq gained 1.17 percent.

Markets welcomed news that the National Association of Realtors had reported pending home sales jumped 10.4 percent in October, much more than expected, offering a glimmer of hope to the troubled US housing market.