RTTNews - After a notably strong open, stocks continue to linger in positive territory, but are well off of their best levels of the day. With buying interest waning in the late morning hours, the major averages are currently holding on to minimal gains on the session.

Traders are digesting comments from Treasury Secretary Timothy Geithner who testified before lawmakers earlier, updating them on the progress of the $700 billion financial rescue plan known as the Troubled Asset Relief Program, or TARP. Geithner said that the financial system is stabilizing, and issued a timeline for further action by the Treasury.

Although stating a pick up in outlook, Geithner cautioned that it will take time for a full recovery.

The testimony came while President Obama held his first quarterly meeting with a 16 member economic advisory board, tasked with providing outside perspective for the administration.

Trader optimism picked up earlier in light of some positive news from the financial sector, as some major banks look to begin a pay back of government bail-out funds.

Relieving some of the concern about the embattled sector was Bank of America's (BAC) sale of common stock, which brought in $13.47 billion in fresh capital for the financial giant. The sale is part of the company's efforts to address a $33.9 billion capital shortfall identified by the U.S. government following the conclusion of the stress test of the nation's nineteen largest banks.

This afternoon, traders will focus on the release of minutes from the Federal Open Market Committee's April meeting. Traders will look to the minutes to gain some near-term economic outlook and any hint of policy moves by the Fed. The minutes are scheduled for release at 2:00 p.m. ET.

On the earnings front, discount retailer Target (TGT) reported first quarter earnings that beat out analyst forecasts by a dime. Traders have reacted positively to the earnings news, driving the stock up by 2.9 percent on the day.

Meanwhile, the world's largest agricultural equipment manufacturer Deere (DE), reported second quarter net income that edged out analyst estimates. The firm's stock advanced following the report, climbing by 2.9 percent on the session.

In other news, the New York arm of the Federal Reserve purchased $7.7 billion worth of securities with maturity dates ranging from February of 2016 to May of 2019 late in the morning. The day's buyback attracted considerably strong interest, with a total of $37.18 billion in treasuries submitted for the purchase.

Overall, the government has bought back $115.58 billion in treasuries since the program began on March 25th.

The major averages have moved off of their best levels of the day, barely holding in positive territory in recent trading. The Dow is currently up by 3.82 to 8478.67, the Nasdaq is up 6.82 to 1741.36, and the S&P 500 is up by 1.89 to 910.02.

Sector News

Most sectors continue to show gains in afternoon trading, helping to keep the major averages in positive territory.

Notable gains have emerged in healthcare provider stocks, with the Morgan Stanley Healthcare Provider Index up by 4.5 percent on the day. With the climb, the index has beaten its best level of the year, set earlier this month. The advance has also bolstered the index to its best level since early October.

Strength continues among steel stocks, with a 3.1 percent gain visible in the Amex Steel Index. The sector index also climbed to its highest level of the year and posted a 7-month high.

Gold, oil stocks continue to show strength on the day as gold and oil futures have climbed considerably in the commodity markets.

On the other hand, the major averages are being dragged down by weakness in banking, utilities and computer hardware stocks, down by at least 1.2 percent.

Stocks in the News

Shares of retailer Ann Taylor (ANN) are down despite the firm reporting a narrower than expected loss. The company reported a first quarter net loss of $2.31 million or $0.04 per share, compared to profit of $25.90 million or $0.43 per share in the same quarter of last year.

Analysts polled by Thomson Reuters expected the company to report a loss of $0.13 per share on revenues of $454.66 million for the quarter.

The firm's stock is down by 8.3 percent on the day, backing off of its highest level of the year posted in the previous session.

Shares of Regions Financial Corp. (RF), the holding company for Regions Bank slipped after the firm announced public offerings of $1 billion of common shares and $250 million of new mandatory convertible preferred shares.

The move raised some concern over share dilution and prompted some of the retreat in the firm's stock on the day. Shares have dipped by 4.5 percent, looking to finish lower for the second session in a row.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished mixed on Wednesday. Japan's benchmark Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index fell 0.3 percent.

Meanwhile, the major European markets closed the day on a mixed note. The French CAC 40 Index finished up 0.8 percent, while the German DAX Index also closed up, rising by 1.6 percent on the session. On the other hand, the U.K.'s FTSE 100 Index closed down by 0.3 percent.

In the bond markets, treasuries have seen some volatility on the day, but are currently in positive territory. Subsequently, the yield on the benchmark ten-year note is down less than a basis point, at 3.237 percent.

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