RTTNews - Stocks moved modestly higher at the start of trading on Monday, with the major averages seeing some further upside after closing higher in each of the four previous sessions. Renewed optimism about the outlook for the global economy contributed to the initial strength.
While buying interest has remained somewhat subdued, most of the major sectors have moved to the upside in early trading. Airline, banking, and oil service stocks are turning in some of the best performances, with oil service stocks moving higher along with the price of crude oil.
The early strength in the markets is partly due comments from a number of central bankers over the weekend at Jackson Hole, Wyoming indicating that interest rates are likely to remain fixed for some time despite some signs of economic stabilization.
At the conference Federal Reserve Chairman Ben Bernanke said, Economic activity appears to be leveling out, both in the United States and abroad. Bernanke also noted that the prospects for a return to growth in the near term appear good.
Meanwhile, in an opinion piece for the Financial Times, economist Nouriel Roubini, who predicted the magnitude of the recent financial troubles, said that he sees a big risk of a double recession.
Roubini stated that the global economy might bottom out in the second half of the year and that the economies in the U.S and other European countries might witness anemic or below trend growth for at least a couple of years.
In corporate news, drug maker Warner Chilcott (WCRX) announced that it has agreed to acquire the prescription drug business of Procter & Gamble (PG) for an up-front cash payment of $3.1 billion. The transaction is expected to close by the end of the 2009 calendar year.
The major averages have continued to move higher over the first few minutes of trading, climbing more firmly into positive territory. The Dow is currently up 40.28 at 9,546.24, the Nasdaq is up 6.97 at 2,027.87 and the S&P 500 is up 5.06 at 1,031.19.
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