RTTNews - Stocks continue to show considerable strength in afternoon trading on Monday, with the major averages challenging their best levels of the day. The move has come ahead of the release of a key industry report from the housing sector.
Traders are eagerly awaiting data from the National Association of Homebuilders on the condition of the U.S. housing market for April. March's reading was the highest since October, raising prospects for the much beleaguered sector.
Last month's data also showed that all three sub-indexes improved, with the indexes for present conditions, future sales outlook and prospective buyer traffic rising. The report on homebuilders' confidence is scheduled to be released at 1 p.m. ET.
Boosting investor appetite for housing stocks were better-than-expected earnings figures from home improvement retailer Lowe's (LOW). The firm reported a first-quarter net income of $0.32 per share, beating out Wall Street analyst estimates of $0.25 per share. The company's stock has seen considerable strength on the day, climbing by 8.4 percent on the session.
Later this week, trading is likely to be impacted by the release of quarterly earnings figures from Hewlett-Packard (HPQ), Home Depot (HD), Target (TGT), Campbell Soup (CPB), and Deere (DE).
In other news, India's Congress Party won a decisive victory in recent elections, raising prospects of stability and likelihood of 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 climbing on the day.
Meanwhile, the Federal Reserve continued it treasury buyback program this morning, part of its quantitative easing efforts. The New York arm of the Federal Reserve purchased $3.18 billion worth of securities with maturity dates ranging from August of 2019 to February of 2026. The day's buyback attracted strong interest, with a total of $15.22 billion in treasuries submitted for the purchase.
With the purchase, the government has bought back $107.87 billion in treasuries since the purchase program began on March 25th.
The major averages are adding to their recent gains, with the Dow up 165.51 at 8,434.15, the Nasdaq up 30.07 at 1710.21, and the S&P 500 up 17.48 at 900.36.
A number of major sectors continue to climb on the day, contributing to the strong run up in equities on the day.
Housing stocks are turning in some of the day's best performances, as reflected by the 6.2 percent gain currently being shown by the Philadelphia Housing Sector Index. With the advance, the index is moving further away from a one-month closing low it set on Wednesday.
The sector index is being bolstered by shares of Lennar (LEN), up by 16.9 percent on the day. Further augmenting the gains in the sector are shares of Standard Pacific (SPF) and M/I Homes (MHO), up by 10.2 and 9.8 percent, respectively.
Significant strength is also visible among banking stocks, with the Kbw Banking Sector Index currently up by 5.7 percent. With the advance, the sector index continues to move away from a 7-day low posted late last week.
Real estate stocks are also on the rise, with the Morgan Stanley Real Estate Index climbing by 5.8 percent on the session.
Some gains are being limited by the pullback in healthcare stocks, with the Morgan Stanley Healthcare Payor Index and the Morgan Stanley Healthcare Provider Index slipping by 2.1 and 1.3 percent, respectively.
Stocks in the News
Shares of Infosys (INFY) are seeing considerable upside following victory of the business friendly Indian Congress Party in the recent major election. The stock is up by 9.6 percent, posting its highest level of the year, and its best level since late September.
Meanwhile, Wells Fargo (WFC) is also rising after Warren Buffet's Berkshire Hathaway (BKHA) announced it was boosting its stake in the financial giant. Shares are up 6.1 percent on the day, continuing their recovery from an 8-day low set last week.
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.
The benchmark index for the Indian market closed up by 17.3 percent on the day following election news.
Meanwhile, the major European markets all closed higher on the day. The French CAC 40 Index and the German DAX Index closed up 2.4 percent, while the U.K.'s FTSE 100 Index finished up by 2.2 percent.
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 5.9 basis points at 3.182 percent.
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