RTTNews - Stocks are posting strong gains in morning trading on Monday, with the major averages all in positive territory. Equities moved notably higher at the open and have added to their gains in recent trading. Nonetheless, some traders may be sitting on the sidelines ahead of a key industry report from the housing sector.
Later today, traders will consider data from the National Association of Homebuilders on the condition of the U.S. housing market for April. The report will be closely monitored as March's reading was the highest since October, raising some optimism regarding the troubled housing sector.
In last month's report, all three sub-indexes improved, with the indexes for present conditions, future sales outlook and prospective buyers traffic rising in the month. The report on homebuilders' confidence is scheduled to be released at 1 p.m. ET.
On the earnings front, home improvement retailer Lowe's Companies Inc. (LOW) reported first-quarter net income of $0.32 per share compared to $0.41 per in the same period last year. The earnings beat out Wall Street analyst estimates which forecasted earnings per share of $0.25. Shares have seen considerable upside in morning trading, rising by 6.1 percent.
As earnings season winds down, Hewlett-Packard (HPQ), Home Depot (HD), Target (TGT), Campbell Soup (CPB), and Deere (DE) will also report quarterly earnings this week.
Overseas, India's Congress Party won a decisive victory in recent elections, raising prospects of stability and economic reform in the world's most populated democracy. Shares of Indian based firms have soared on the news, with Wipro (WIT), Dr. Reddy's Laboratories (RDY) Sify Technologies (SIFY), ICICI Bank (IBN), Tata Motors (TTM) and HDFC Bank (HDB) all rising considerably in morning dealing.
The major averages continue to show notable strength in recent trading. The Dow is currently up 147.11 at 8,415.75, the Nasdaq is up 23.73 at 1704.45, and the S&P 500 is up 15.45 at 898.33.
Reflecting the notable upward moved on the day, a number of major sectors are turning in a strong performance in mid-morning trading.
Significant strength has emerged among banking stocks, with gains visible in the Kbw Banking Sector Index, up by 5.7 percent on the day. With the advance, the sector index continues to move away from a weekly low posted late last week.
Also contributing to the upward move on the day are housing stocks, as reflected by the 5.8 percent gain currently being shown by the Philadelphia Housing Sector Index. The index is moving further off the one-month closing low it set on Wednesday.
Lennar (LEN) is turning in one of the housing sector's best performances, with the homebuilder currently up 14.0 percent. Hovnanian (HOV) and Radian (RDN) are also posting strong gains.
On the other hand, gold stocks are pulling back, dragging the Amex Gold Bugs Index down 2.0 percent. The average is adding to recent losses posted in the two previous sessions, moving further off its high for the year, set earlier last week.
Some healthcare and tobacco and utility stocks have also come under pressure over the course of morning trading.
Stocks Driven By Analyst Comments
Energizer (ENR) is climbing in morning trading after being upgraded by UBS from Sell to Neutral. Shares have climbed by 2.0 percent on the upgrade, continuing to recover from a 7-week low posted Thursday.
Shares of Bank of America (BAC) are seeing considerable upside following an upgrade to a Buy rating from a Neutral rating by Goldman Sachs. The stock has risen by 10.4 percent, moving further off of a 2-week low set on late last week.
On the other hand, shares of Allegheny Energy (AYE) are considerably lower in light of a downgrade by Wachovia. The stock was downgraded to Outperform to Market Perform, prompting some of the weakness on the day. Subsequently, shares have slipped 9.1 percent, extending recent losses and reaching a fresh 6-week low.
In overseas trading, stock markets across the Asia-Pacific region finished largely mixed on Monday. Japan's benchmark Nikkei 225 Index fell by 2.4 percent, while Hong Kong's Hang Seng Index climbed 1.3 percent.
Meanwhile, the major European markets are currently turning in a strong performance. The French CAC 40 Index is up 1.8 percent, while the German DAX Index is also up, rising by 1.3 percent. The U.K.'s FTSE 100 Index is also gaining, up by 1.6 percent.
The benchmark index for the Indian market closed up by 17.3 percent on the day following election news.
In the bond markets, treasuries have moved into negative territory after a strong open. Subsequently, the yield on the benchmark ten-year note is up 2.0 basis points at 3.143 percent.
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