RTTNews - Stocks are continuing their strong performance in mid-afternoon trading on Monday, with strength in the financial sector contributing to the upward move. The major averages are all in positive territory by significant margins after struggling to find direction early on.
The gains by financial stocks come on the heels of positive comments from Meredith Whitney, who raised her rating on Goldman Sachs (GS) to Buy from Neutral. Whitney also said Bank of America (BAC) could provide value for investors.
On the earnings front, railroad operator CSX Corp. (CSX) is scheduled to report second quarter results after the closing bell. Analysts expect the company to report earnings of $0.69 per share for the quarter. Novellus Systems (NVLS) will also report is second quarter results after the markets close today.
In economic news, the Treasury Department released its budget for June showing a budget gap of $94.3 billion, deeper than the expected gap of $77.5 billion. The wider than expected shortfall comes amid contracting receipts and ramped up stimulus spending. While equities saw no reaction to the news, treasuries weakened considerably.
The major averages are near their best levels of the day, moving roughly sideways in recent trading. The Dow is currently up 144.27 at 8,290.79, the Nasdaq is up 27.76 at 1,783.79 and the S&P 500 is up 16.76 at 895.89.
Nearly all of the Dow components are trading in positive territory, contributing to the triple-digit gain being shown by the blue chip index.
Financial stocks within the Dow are turning in some of the best performances. Bank of America (BAC) and JP Morgan Chase (JPM) are up by 6.8 percent and 5.4 percent, respectively.
General Electric (GE) is also advancing, posting a gain of 5.7 percent. Shares of the diversified conglomerate are continuing their recovery from a three-month low reached last Wednesday.
Shares of United Technologies (UTX), Pfizer (PFE), and Caterpillar (CAT) are all seeing comparable gains, continuing their climb away from their recent lows.
Kraft Foods (KFT) is also posting a strong gain, rising 3.1 percent in mid-afternoon trading. The day's gain has helped the stock to reach its best intra-day level in just over one month.
Further, tech giants Microsoft (MSFT) and Intel (INTC) are also turning in solid performances, reflecting the recent strength in the tech sector.
On the other hand, Hewlett-Packard (HPQ) is currently the only Dow component trading in the red, with the computer and printer maker currently down 0.4 percent.
While financials continue to surge in mid-afternoon dealing, strength also remains visible among commercial real estate stocks, with the Morgan Stanley Real Estate Index posting a gain of 2.4 percent. The index is moving off of its worst closing price in over two months set on Friday.
Retail stocks are also surging, with a 2.3 percent gain being shown by the S&P Retail Index. The sector is being helped by shares of Whole Foods Market (WFMI), which are up 3.2 percent. The stock is rising for the fourth straight session, moving further off a three-month closing low.
Defense, electronic storage, semiconductor and airline stocks are also showing notable upward moves, reflected broad based strength in the markets.
In Focus: Earnings, Corporate News
In earnings news, industrial and construction supplies wholesaler Fastenal (FAST) reported second quarter earnings that fell to $0.29 per share from $0.51 per share in the year-ago quarter, coming in below analyst estimates of $0.33 per share.
Ahead of the results, Fastenal announced Friday that its board of directors authorized the repurchase of 2 million shares in the market.
Meanwhile, aluminum die-cast auto parts maker J. L. French Automotive Castings, whose major customers include General Motors and Ford (F), announced that it is filing for bankruptcy protection under Chapter 11 with the District Court of Delaware.
In overseas trading, stock markets across the Asia-Pacific region ended Monday's session firmly on the downside, with Japan's benchmark Nikkei 225 Index and Hong Kong's Hang Seng Index both falling by 2.6 percent.
Meanwhile, the major European markets closed firmly on the upside, with the German DAX Index and the French CAC 40 Index finishing up by 2.9 percent and 2.3 percent, respectively. The U.K.'s FTSE 100 Index also rose, posting a gain of 1.7 percent.
In the bond markets, treasuries are seeing notable weakness as equities continue to gain. Subsequently, the yield on the benchmark ten-year note is trading at 3.342 percent, rising by 4.7 basis points on the day.
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