* Apple's new iPhone hits world, stock at peak
* Michael Kors Holdings boosts profit guidance, stock jumps
* Vivus shares tumble on obesity drug outlook
* Dow up 0.3 pct, S&P 500 up 0.3 pct, Nasdaq up 0.5 pct
By Edward Krudy
NEW YORK, Sept 21 (Reuters) - U.S. stocks rose on Friday as
Apple unveiled its latest iPhone worldwide, driving its shares
up to a new peak, and Spain appeared to move closer to an
anticipated bailout package.
Apple Inc climbed 0.9 percent to $704.78, after
earlier hitting an all-time high of $705.07. The iPhone 5 hit
stores around the world, giving the world's most valuable
company a boost ahead of the crucial end-of-year holiday season.
"In a stable full of donkeys, there is one racehorse, and
everyone is buying the racehorse," said Brian Battle, director
of trading at Performance Trust Capital Partners in Chicago, in
reference to Apple. "You have - which is something rare in the
market these days - a stock that has fundamental value. It's not
just a headline. It's not just hope."
Ken Polcari, managing director of ICAP Equities in New
York, said the latest developments in Spain also bolstered
investors' positive sentiment.
Spain is considering freezing pensions and speeding up a
planned rise in the retirement age as it races to cut spending
and meet conditions of an expected international sovereign aid
package, sources with knowledge of the matter said.
"There is that news out of Europe, where they seem to be
making more progress towards helping Spain out, so that is going
to continue to kind of support us, for sure," Polcari said.
At midday stocks were slightly off their highs of the day.
The Dow Jones industrial average gained 35.60 points,
or 0.26 percent, to 13,632.53. The Standard & Poor's 500 Index
gained 4.60 points, or 0.31 percent, to 1,464.86. The
Nasdaq Composite Index gained 15.88 points, or 0.50
percent, to 3,191.84.
Spain's deputy prime minister later denied the government
was mulling the freezing of pensions. The German finance
minister said the country did not need a sovereign bailout on
top of the package already approved for its banks.
The benchmark Standard & Poor's 500 Index has gained
about 6.2 percent since the start of August, mostly on
expectations for new economic stimulus measures from the world's
central banks. Last Thursday, the Federal Reserve announced a
third round of stimulus or quantitative easing, known as Q3,
intended to bolster the economy and reduce U.S. unemployment.
This week, though, the market's action has been muted, with
the S&P 500 barely moving 0.4 percent in either direction daily.
There may be increased volatility toward Friday's close
because of "quadruple witching," the quarterly settlement and
expiration of four different types of September e q uity futures
and options contracts. Expiration can lead to greater volume and
volatility as players adjust or exercise their derivative
"The option expiry is going to create this massive volume -
as it did on the opening - at the close," Polcari said.
In looking ahead to quarterly earnings, one bright spot came
from the fashion front. Shares of Michael Kors Holdings Ltd
surged 5.8 percent to $55.53 after the fashion and
accessory designer's company said it will likely earn more than
it expected in the second quarter as it banks on strong global
Housing shares advanced, led by KB Home, up 14
percent at $14.95 after the fifth-largest U.S. homebuilder
posted a surprising quarterly profit and said its revenue
backlog hit a four-year high. The PHLX housing sector index
climbed 2.6 percent.
Oracle Corp added 0.5 percent to $32.42 a day after
the software maker reported first-quarter earnings, excluding
items, that met Wall Street's expectations. Oracle's hardware
sales, however, are expected to drop further after tumbling 24
percent from a year ago..
Darden Restaurants Inc, whose dining-out chains
include the Olive Garden, posted first-quarter earnings that
beat analysts' estimates. Darden stood by its sales and profit
forecast for the year. It stock rose 4.5 percent to $57.19.
Vivus Inc shares plunged 11.9 percent to $20.91
after the drug-development company said it expects a European
committee to recommend against the approval of its obesity drug
Qsiva, based on preliminary feedback from the committee.