Stocks are continuing to show substantial strength during mid-morning trading on Thursday as positive news in the financial sector boosts the broader markets while some better-than-expected economic news helps to fuel the rise.
The financial sector is seeing some renewed buying interest as investors respond strongly to Wells Fargo (WFC), which said it now expects to report first quarter earnings of $3 billion or $0.55 per share compared to analyst estimates of $0.23 per share. On the news the stock is up 25 percent.
The significant boost in expected earnings per share has helped to drive the broader markets higher as investors have taken the strength to mean an improved state for the economy as a whole.
In other corporate news, ratings agency Moody's downgraded the credit rating for billionaire Warren Buffett's Berkshire Hathaway Inc. and several of its insurance subsidiaries.
The long-term issuer rating of Berkshire Hathaway was lowered to Aa2 from Aaa, while the Insurance Financial Strength rating of National Indemnity Co., a subsidiary of Berkshire and its flagship reinsurer, was downgraded to Aa1 from Aaa.
On the economic front, a report from the Labor Department is helping to drive stocks higher, showing a bigger than expected decrease in weekly jobless claims.
The report showed that jobless claims fell to 654,000 from the previous week's revised figure of 674,000. Economists had expected jobless claims to edge down to 660,000 from the 669,000 originally reported for the previous week.
However, the Labor Department also said that continuing claims rose to a new record high of 5.840 million in the week ended March 28th from the preceding week's revised level of 5.745 million.
In other economic news, the Commerce Department said that the U.S. trade deficit narrowed to $26.0 billion in February from $36.2 billion in January. Economists had been expecting the trade deficit to come in at $36.0 billion.
In recent trading, the major markets are holding near their intraday highs, with the Dow up 197.05 at 8,034.16, while the Nasdaq is posting a gain of 46.81 at 1,637.47 and the S&P 500 seeing a gain of 23.35 at 848.51.
Following the massive gains by Wells Fargo, banking stocks are leading the broader markets higher during Thursday's mid-morning trading. The gains in the banking sector are being well illustrated by a 16.2 percent rise in the S&P Banks Index.
With the advance, the index has climbed to its highest level in two months.
Housing, semiconductor, and transportation stocks are also showing considerable strength on the day. The Philadelphia Housing Index is up 7.3 percent, while the Philadelphia Semiconductor Index and the Dow Jones Transportation average are seeing gains of 4.8 percent and 5.2 percent, respectively.
Real estate, healthcare, and networking stocks are also driving higher during the session.
Meanwhile, the tobacco sector is one of the few major sectors that is suffering any losses on the day, pushing the Amex Tobacco Index down less than one percent.
Stocks Driven By Analyst Comments
RF Micro Device (RFMD) is posting a 10.2 percent gain on the day after being upgraded to Buy from Neutral at UBS. With the advance, the stock is trading at its highest level in five months.
Additionally, Liberty Media Capital (LCAPA) is posting a gain of 12.2 percent following an upgrade at Deutsche Bank to Buy from Hold. The upgrade came as deals from the management have added around $15 to the company's net asset value per share.
Deutsche Bank analysts said that the recent deal under which it provided a loan to Sirius XM Radio in return for a 40 percent stake and a $30 million fee added around $9 per share. The rest came from recent stock repurchasing.
Meanwhile, Salesforce.com (CRM) is suffering a loss of 2.8 percent after the company was downgraded to Sell from Hold at Wedbush Morgan.
In overseas trading, stock markets across the Asia-Pacific region showed strong upward moves on Thursday, benefiting from some optimism about the outlook for the global economy. Japan's benchmark Nikkei 225 Index closed up 3.7 percent.
The major European markets are continuing to see strength, moving back towards their intraday highs. The U.K.'s FTSE 100 Index is up 1.1 percent, while the French CAC 40 Index and the German DAX Index are posting gains of 2.1 percent and 3.2 percent, respectively.
In the bond market, treasuries are suffering considerable weakness on the day, but have come off their lows. Subsequently, the yield on the benchmark 10-year note is up 6.8 basis points at 2.915 percent.
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