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Stocks edge up after Apple begins dividend

U.S. stocks edged higher Monday, hovering near 4-year highs, as shares of Apple rose after it said it will begin paying a dividend and buy back stock.

Apple Inc, which accounts for about 19 percent of the Nasdaq 100, was up 1.3 percent to $593.35, while the S&P technology index added 0.2 percent. Apple briefly topped the $600 mark for the first time last week.

With a heavy weighting on several indexes, Apple has often dictated market direction. The stock has a 50-day correlation of 0.95 with the S&P, which many analysts say was a big reason for the benchmark's run-up.

"Although we had seen (Apple) coming, when reality hits there's still some confusion out there among traders," which was reflected in the early volatility, said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

"We've had this uninterrupted rally since mid-December, but still we have a lot of money sitting on the sidelines, waiting for a correction."

Ipad maker Apple will pay a quarterly dividend of $2.65 and buy back up to $10 billion of its stock. Speculation heated up in recent weeks over how the world's most valuable publicly traded company might use its $98 billion cash stockpile.

On Friday, the S&P 500 had its fifth straight weekly gain and its best week in three months. The index has risen in seven of the past eight sessions, climbing 4.5 percent.

Investors, buoyant over the economic outlook, have pushed the S&P above 1,400 to its highest level since May 2008.

United Parcel Service Inc rose 2.6 percent to $80.42 after hitting a new high as it clinched a deal to buy Dutch peer TNT Express, making UPS the market leader in Europe.

On the economic front, U.S. homebuilder sentiment was unchanged in March, holding at its highest level since June 2007, while sentiment in February was revised lower. Market reaction was muted.

Broadcom Corp gained 2 percent to $38.55 after the chipmaker said it won a preliminary injunction against Emulex Corp in a patent infringement lawsuit.

Reuters contributed to this report.