RTTNews - Stocks continue to post strong gains in early afternoon trading on Wednesday, bolstered by the day's largely positive economic data. The major averages are all in positive territory, although they have had difficulty sustaining the earlier rally amid moderate volume on the day.

The upward move was due in part to the Institute for Supply Management's report showing that the contraction in manufacturing activity slowed in the month of June amid some encouraging signs for the sector.

Further bolstering the day's optimism was a report from the National Association of Realtors showing that pending home sales increased for the fourth consecutive month in May. Favorable housing affordability and a first-time buyer tax credit contributed to the continued increase.

Meanwhile, data from the Commerce Department indicated that construction spending fell by more than expected in May, mitigating some of the positive mood on Wall Street.

Earlier, traders largely shrugged off a report from private payroll processor Automatic Data Processing revealing that private sector employment fell by more than economists had been expecting in the month of June, as the report also showed a slowdown in the pace of job losses.

Since pulling back off their best levels of the day in mid-morning trading, the major averages have essentially been moving sideways. The Dow is currently up 109.74 at 8,556.74, the Nasdaq is up 24.37 at 1,859.41 and the S&P 500 is up 10.52 at 929.84.

Sector News

Gold stocks continue to see significant strength in early afternoon trading, bouncing back from yesterday's retreat. The NYSE Arca Gold Bugs Index is up by 5.2 percent, although it remains well off the ten-month closing high it set in early June.

The gains by gold stocks come as the price of the precious metal has moved notably higher after showing a steep decline on Tuesday. After ending the previous session down $13.30 at $927.40 an ounce, gold for August delivery is currently up $14 at $941.40 an ounce.

Semiconductor and networking stocks are also posting notable gains. Subsequently, the Philadelphia Semiconductor Index and the NYSE Arca Networking Index are up by 2.7 percent and 2.5 percent, respectively. The indices are continuing their climb off of one-month closing lows set in late June.

Driving the networking sector higher are shares of Adtran (ADTN), which are advancing by 5.1 percent. With the jump, the stock was able to climb to its best intraday price in over nine months, and it is now poised to finish at its best closing level in ten months.

Healthcare provider stocks are also on the rise, with the Morgan Stanley Healthcare Provider Index up by 3.4 percent on the day. With the move, the index is continuing to move away from a nine week closing low set late last month.

Further strength is visible among transportation, steel, health insurance and electronic storage stocks, reflecting the widespread strength in the equity markets on the day.

Stocks In The News

Oshkosh (OSK) is rising in early afternoon trading after the company said Tuesday that it was chosen to supply the U.S. Department of Defense with MRAP All Terrain Vehicles or M-ATV for its fighting forces.

The firm received an initial delivery order from the U.S. Army for 2,244 M-ATVs valued at $1.05 billion following months of government testing on multiple production-ready vehicles. Oshkosh stock has skyrocketed by 25.4 percent on the news, reaching its best intra-day price in eleven months.

Constellation Brands (STZ) is also climbing after the company reported first-quarter net income of $0.33, which beat Wall Street expectations of $0.32 per share. Shares of the alcoholic beverage producer are up by 9.2 percent after reaching its best intraday level in four months earlier in the day.

Meanwhile, Myriad Genetics (MYGN) is sliding after the firm announced after the close Tuesday that it expects molecular diagnostic revenue for the fiscal year 2009 to be about $326 million compared to its previous estimate of $330 million. The stock is down by 26.6 percent, falling to its worst intraday price in nearly a year.

In Focus: Economic Data, Earnings News

As mentioned above, the ISM said its index of activity in the manufacturing rose to 44.8 in June from 42.8 in May, with a reading below 50 indicating a contraction in the sector. The index came roughly in line with the expectations of economists, who forecast a reading of 44.6.

Norbert J. Ore, chair of the ISM Manufacturing Business Survey Committee said, Manufacturing continues to contract at a slower rate, but the trends in the indexes are encouraging as seven of 18 industries reported growth in June.

Separately, housing industry group NAR said its pending home sales index rose 0.1 percent to 90.7 in May from an upwardly revised reading of 90.6 in April. Economists had been expecting the index to come in unchanged compared to the 90.3 originally reported for the previous month.

More economic data came from the U.S. Commerce Department, which revealed that construction spending fell 0.9 percent in May, following a revised 0.6 percent increase in the previous month. Economists had expected construction spending to fall by 0.6 percent compared to the 0.8 percent increase that was originally reported for April.

Meanwhile, ADP said that non-farm private employment fell by 473,000 jobs in June following a revised decrease of 485,000 jobs in May. Economists had expected a decrease of 394,000 jobs compared to the loss of 532,000 jobs originally reported for the previous month.

On the earning front, General Mills (GIS) reported adjusted fourth-quarter net income of $0.86, up 18 percent from $0.73 in the same period last year. Analysts expected the firm to report earnings of $0.80 per share. Shares of the consumer foods manufacturer are seeing some strength in early afternoon dealing.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended Wednesday's session on a mixed note. Japan's benchmark Nikkei 225 Index closed down by 0.2 percent, while South Korea's KOSPI Index closed up by 1.6 percent. Trading in Hong Kong was closed for the day.

Meanwhile, the major European markets closed notably higher, with the German DAX Index and French CAC 40 Index rising by 2 percent and 2.4 percent, respectively. The U.K.'s FTSE 100 Index also moved higher, advancing by 2.2 percent.

In the bond markets, treasuries continue to bounce around in negative territory amid the day's rally on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.564 percent, seeing a jump of 4.1 basis points on the day.

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