With traders reacting positively to the latest private sector employment report, stocks are moving mostly higher in mid-morning trading on Wednesday, but the major averages have moved well off their best levels of the day.

Before the start of trading, Automatic Data Processing (ADP) released a report showing a continued decrease in private sector employment in the month of April, although the decrease in jobs was much smaller than economists had expected.

The report showed that non-farm private employment fell by 491,000 jobs in April following a revised decrease of 708,000 jobs in March. Economists had expected a decrease of 645,000 jobs compared to the loss of 742,000 jobs originally reported for the previous month.

The smaller than expected decrease in private sector jobs marked the smallest monthly decrease since a loss of 352,000 jobs in October 2008.

Peter Boockvar, equity strategist at Miller Tabak, said the smaller than expected decrease could reflect a static level of firing, although he noted that continuing jobless claims have continued to move higher in recent weeks, reflecting the difficulty in finding new jobs.

Either way, we'll take less bad, as it's the new good, Boockvar added.

While stocks initially showed a strong upward move on the data, buying interest waned not long after the open. Some traders were reluctant to continue buying stocks ahead of the release of the government's bank stress test results on Thursday.

The major averages have subsequently turned lower over the course of the morning, with the tech-heavy Nasdaq pulling back well off its high for the session and into negative territory. At its high for the session, the Nasdaq was at a six-month intraday high.

With the Dow and the S&P 500 holding onto modest gains, the major averages are currently turning in a mixed performance. While the Nasdaq is down 11.04 at 1,743.08, the Dow is up 28.12 at 8,438.77 and the S&P 500 is up 5.05 at 908.85.

Sector News

While recent reports have suggested that the government's stress tests may show that several banks need to raise additional capital, banking stocks are seeing considerable strength. The Kbw Bank Index is up 5.4 percent after reaching a more than three-month intraday high.

Zions Bancorp (ZION) is turning in one of the bank sector's best performances, with the regional bank currently up 16.1 percent. Dow components Bank of America (BAC) and Citigroup (C) are also posting notable gains.

Gold stocks are also holding onto strong gains, benefiting from a continued increase by the price of the precious metal. With gold for June delivery currently up $7.40 at $911.70 an ounce, the Amex Gold Bugs Index is up 3.5 percent.

With most other commodities prices moving higher, most resource stocks are posting notable gains along with gold stocks. The Philadelphia Oil Service Index is currently up 2.2 percent, while the Amex Natural Gas Index is up 2.7 percent.

On the other hand, considerable weakness has emerged in the housing sector, as reflected by the 4 percent loss currently being shown by the Philadelphia Housing Index. Pulte Homes (PHM) and Centex (CTX) are under pressure despite reporting narrower quarterly losses.

Some biotechnology, computer hardware and networking stocks have also come under considerable selling pressure, contributing to the notable pullback by the tech-heavy Nasdaq.

Stocks Driven By Analyst Comments

Extending a recent upward move, shares of Wet Seal (WTSLA) are seeing considerable strength in morning trading, with the teen apparel retailer currently up 6.2 percent. With the gain, Wet Seal has risen to its best intraday level in well over seven months.

The gain by Wet Seal comes after Piper Jaffray upgraded its rating on the company's stock to Buy from Neutral. Piper Jaffray also raised its price target on Wet Seal to $5 per share from $3 per share.

Shares of HSBC Holdings (HBC) are also turning in a strong performance after JP Morgan upgraded its rating on the bank to Neutral from Underweight. HSBC is currently posting a 5 percent gain after reaching a nearly three-month intraday high.

On the other hand, shares of Barclays (BCS) are currently down 5.7 percent after UBS downgraded its rating on the financial services provider to Sell from Neutral. Barclays is pulling back further of the nearly seven-month closing high it set on Monday.

Other Markets

In overseas trading, stock markets in the Asia-Pacific region turned in a mixed performance on Wednesday amid some uncertainty about the release of the U.S. stress test results. The Japanese market remained closed for the third straight day.

Meanwhile, the major European markets are currently all moving higher, with the U.K.'s FTSE 100 Index advancing 1.8 percent, while the French CAC 40 Index and the German DAX Index are up 1.7 percent and 1.5 percent, respectively.

In the bond market, treasuries are seeing some weakness, although they have recently moved well off their worst levels of the day. Subsequently, the yield on the benchmark ten-year note is currently up less than a basis point at 3.165 percent after reaching a high of 3.194 percent.

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