RTTNews - Stocks are holding onto strong gains in early afternoon trading on Monday following some hints regarding interest rate stability from a number of key central bankers. The major averages are all in positive territory, looking to extend last week's winning streak.

Traders have focused on comments from a number of central bankers over the weekend at the Federal Reserve conference in Jackson Hole, Wyoming, indicating that interest rates are likely to remain fixed for some time despite some signs of economic stabilization.

At the conference, Federal Reserve Chairman Ben Bernanke said, Economic activity appears to be leveling out, both in the United States and abroad. Bernanke also noted that the prospects for a return to growth in the near term appear good.

Some traders remain cautious, however, as economist Nouriel Roubini, who predicted the magnitude of the recent financial troubles, said that he sees a big risk of a double recession in an article for the Financial Times.

Roubini stated that the global economy might bottom out in the second half of the year and that the economies in the U.S and other European countries might witness anemic or below trend growth for at least a couple of years.

Automakers are also in focus today following the announcement by the U.S administration that the popular cash for clunkers program will be drawn to a close today.

While the major averages have moved well off their best levels of the day, they are currently holding onto notable gains. The Dow is currently up 52.67 at 9,558.63, the Nasdaq is up 7.22 at 2,028.12 and the S&P 500 is up 6.33 at 1,032.46.

Sector News

Notable strength remains visible among banking stocks, as reflected by the 1.2 percent gain being shown by the Kbw Bank Index. Earlier in the session, the index reached its best intraday level in eight and a half months.

Citigroup (C) is turning in one of the sector's best performances, with the financial service giant currently up 4.7 percent. With the gain, shares of Citigroup have risen to a seven-month intraday high.

Airline stocks also continue to turn in some of the day's best performances, with the NYSE Arca Airline Index showing a 2.9 percent gain. With the advance, the index has climbed to its best intraday level in seven months.

Further, steel, gold and oil service stocks are also posting strong gains, reflecting strength in the resource sector. The gains by resource stocks come amid an increase in commodity prices on the NYMEX, where oil has jumped by $0.72 to $74.61 a barrel.

Tobacco, commercial real estate, semiconductor and electronic storage stocks are also posting strong gains. On the other hand, modest weakness has emerged among retail stocks.

Stocks In The News

Charlotte Russe Holding Inc. (CHIC) is on the rise in early afternoon trading after the firm announced that it has entered into a definitive agreement to be acquired by investment funds managed by Advent International Corporation for a total value of approximately $380 million. The stock has surged up by 25.9 percent, setting a one-year intraday high.

Drug maker Warner Chilcott (WCRX) is also gaining after revealing that it has agreed to acquire the prescription drug business of Procter & Gamble (PG) for an up-front cash payment of $3.1 billion. The transaction is expected to close by the end of the 2009 calendar year. Warner Chilcott has jumped by 29.5 percent, reaching a historic high.

On the other hand, shares of Valeant Pharmaceuticals (VRX) are retreating amid news that its clinical trial of retigabine for the treatment of pain associated with post herpetic neuralgia did not meet its pre-specified primary efficacy endpoint. The stock has plunged by 8.2 percent, pulling back further off the multi-year high set earlier this month.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed notably higher on Monday. Japan's benchmark Nikkei 225 Index surged up by 3.4 percent, while Hong Kong's Hang Seng Index rose by 1.7 percent.

The major European markets also saw strong gains, with the German DAX Index and the U.K.'s FTSE 100 Index both rising by 0.8 percent, while the French CAC 40 Index gained 1 percent.

In the bond markets, treasuries have turned positive and are showing modest strength on the day despite the strength on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.524 percent, posting a loss of 3.2 basis points.

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