RTTNews - Stocks are in a holding pattern in mid-afternoon trading on Monday, continuing to post modest gains after the day's promising earnings data and calming news from commercial lending giant CIT Group (CIT). The major averages all remain in positive territory, adding to the strong gains seen last week.
In an interview with RTT News, Ron Kiddoo, chief investment officer at Cozad Asset Management reiterated his near-term outlook for the markets, stating that until we start to see some signs of real positive signs economic growth, which we probably won't see until the end of the year, I don't think we'll see another sharp move up in the market.
He also called some of the latest better than expected economic data signs of a lessening recession, but he said those aren't enough.
Nonetheless, Kiddoo provided a rather bullish forecast for the remainder of the year, saying, We're still thinking the market will be positive through the end of the year. I think we'll have another potential 10 percent move up in the market from here at some time before the end of the year.
On the economic front today, the Conference Board released a report showing that its index of leading economic indicators increased by more than expected in June, although both the coincident index and lagging index continued to decline.
Earlier this morning, some trader concern regarding the bankruptcy of CIT Group was alleviated, as the lending giant reportedly secured $3 billion in financing from some of its largest bondholders.
In earnings news, Halliburton Co. (HAL), M&T Bank Corp. (MTB), Hasbro (HAS) and Johnson Controls (JCI) all reported quarterly results that largely exceeded Wall Street expectations, bolstering trader optimism.
In other news, Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, predicted modest growth starting in the second half of the year, though he said there is not likely to be a strong recovery in the medium term.
Also this afternoon, President Barack Obama laid out his latest appeal for healthcare reform to the public and lawmakers, stressing the broad based importance of his proposal.
The major averages have backed away from challenging their best levels of the day in recent trading, but they remain up by solid margins. The Dow is currently up 64.69 at 8,808.63, the Nasdaq is up 11.24 at 1,897.85 and the S&P 500 is up 6.39 at 946.77.
The majority of the Dow components are in the green, helping the blue chip index to post a strong gain in mid-afternoon trading.
Leading the way higher are shares of Caterpillar (CAT), which are up by 7 percent. The day's gain has propelled the stock to its best intraday price in over a month.
Cisco (CSCO) and American Express (AXP) are also posting strong gains, advancing by 2.5 percent and 2.6 percent, respectively. Cisco has risen to its best intraday level in well over nine months, while American Express reached its highest intraday price in over eight months.
While Alcoa (AA), Disney (DIS), United Technologies (UTX) are also posting strong gains, notable weakness is visible in shares of Bank of America (BAC), which are down by 4.7 percent. Despite puling back for a third straight session, the stock remains stuck in a recent trading range.
Further, Procter & Gamble (PG) is retreating by 0.9 percent, while Intel (INTC) is sliding by 0.7 percent. With the move, Procter & Gamble is backing off of its best closing price in well over five months set on Friday, while Intel is pulling back off a nine month closing high.
Biotechnology, airline and resource stocks continue to record considerable gains in mid-afternoon trading. Notably, steel and gold continue to lead the way higher in the resource sector.
The NYSE Arca Gold Bugs Index is up by 3.7 percent on the day, with the advance prompted by a surge in the price of the precious metal, which closed up $11 at $948.50 an ounce.
Further, the NYSE Arca Steel Index is up by 3 percent, extending its gains for the sixth straight session. The day's advance has propelled the index to its best intraday level in just over a month.
Boosting the index are shares of Gerdau SA (GGB) and Cliffs Natural Resources (CLF), which are up by 5.5 percent and 4.6 percent, respectively.
Commercial real estate, railroad, internet and retail stocks are also on the rise, while health insurance and some banking stocks are moving modestly lower.
In Focus: Leading Economic Indicators, Earnings
As mentioned above, the Conference Board report showed that the leading indicators index increased by 0.7 percent in June following an upwardly revised 1.3 percent increase in May. Economists had expected the index to increase by 0.5 percent compared to the 1.2 percent increase originally reported for the previous month.
In earnings news, oilfield service provider Halliburton reported second quarter net income of $0.29 per share, down from $0.55 per share in the same period last year. The results surpassed the Wall Street forecast of $0.27 per share.
M&T Bank revealed second-quarter net income of $0.36 per share, compared to $1.44 per share in the same quarter of last year. The earnings fell short of analyst expectations, which called for earnings of $0.48 per share.
Hasbro announced an adjusted second quarter net income of $0.26 per share, compared to $0.25 per share in last year quarter. Analysts expected the firm to earn $0.23 per share.
Meanwhile, Texas Instruments (TXN), Boston Scientific Corporation (BSX), and Legg Mason (LM) are scheduled to report after the markets close.
In overseas trading, stock markets across the Asia-Pacific region closed on the upside Monday, with Hong Kong's Hang Seng Index surging up by 3.7 percent while South Korea's benchmark KOSPI Index posted a gain of 2.7 percent.
The major European markets also closed notably higher, with the German DAX Index and the French CAC 40 Index finishing up by 1 percent and 1.6 percent, respectively. The U.K.'s FTSE 100 Index also rose, posting a 1.3 percent gain on the day.
In the bond markets, treasuries are now seeing notable strength, more than offsetting early losses. Subsequently, the yield on the benchmark ten-year note is trading at 3.591 percent, falling by 6.0 basis points.
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