RTTNews - After showing a strong upward move at the outset, stocks are continuing to post considerable gains in early afternoon trading on Wednesday, largely fueled by a series of promising earnings reports. The major averages are all in positive territory by substantial margins, although buying interest has waned somewhat from earlier in the session.
The focus of the broader markets has been on earnings reports, headed by Intel (INTC), which beat analysts' second quarter earnings estimates. While Yum! Brands (YUM) also beat expectations, Abbott Labs (ABT) and Altera (ALTR) reported earnings that came in line with estimates.
On the economic front, data from the U.S. Labor Department indicated that consumer prices rose by more than expected in June compared to the previous month. Core prices also rose by a larger than expected margin.
In a separate report, the New York Fed reported that conditions for New York manufacturers were roughly flat in July, with the index of activity in the sector rising to a level close to zero.
A separate report from the Federal Reserve indicated a continued decrease in industrial production in the month of June, although the rate of decline slowed by more than economists had been anticipating.
The major averages have been more or less rangebound in recent trading, hovering near their best levels of the day. The Dow is currently up 192.94 at 8,552.43, the Nasdaq is up 49.97 at 1,849.70 and the S&P 500 is up 20.29 at 926.13.
Resource stocks are continuing to soar in early afternoon trading, with steel and gold stocks posting notable gains. The NYSE Arca Steel Index and the NYSE Arca Gold Bugs Index are up by 5.9 percent and 4.5 percent, respectively, seeing their third straight session of gains.
Gold stocks have been helped by an increase in the price of the precious metal on the NYMEX, where it has jumped by $16.30 to $939.10 per ounce.
While technology-related stocks are also extending their notable upward move, strong gains are also visible in airline stocks. The NYSE Arca Airline Index is up by 3.9 percent, reaching its best intraday level in just over two months.
The airline index is being bolstered by shares of foreign airlines TAM S.A. (TAM) and Gol Linhas (GOL), which are up by 9.5 percent and 7.5 percent, respectively. With the gains, the stocks have soared to their best intraday levels in roughly nine months.
Further, housing, banking telecommunication and defense stocks are also on the rise, representing the day's strength in a broad variety of segments in the equity markets. Meanwhile, trucking stocks are bucking the day's rally, with the Dow Jones Trucking Index down by 2.2 percent.
Stocks In The News
Gannett Co. (GCI) is soaring in early afternoon trading, after the firm reported adjusted second quarter net income of $0.46 per share, beating analyst estimates of $0.36 per share. The stock is surging by 28.9 percent, reaching its best intraday price in just over a month.
Altera is also advancing after reporting second quarter net income of $0.16 per share, in line with Wall Street analyst consensus. Shares of the semiconductor supplier are up by 5.3 percent, rising to their best intraday level in six weeks.
On the other hand, J.B. Hunt Transport Services (JBHT) is moving to the downside after the trucking company reported second quarter earnings that fell short of analyst estimates. The stock is sliding by 9 percent, falling to its worst intraday price in nearly seven weeks.
In Focus: Earnings, Economic Data
On the earnings front, Abbott Laboratories reported adjusted second quarter earnings of $0.89 per share, up from $0.84 per share in the year ago quarter. The quarterly results were in-line with Wall Street estimates of $ 0.89 per share for the quarter.
Yum! Brands reported adjusted second quarter earnings of $0.50 per share, up from $0.45 per share in the year-ago quarter. Analysts forecast quarterly earnings of $0.43 per share. Looking ahead, the firm maintained its expectation for full year adjusted earnings of $2.10 per share, representing 10 percent growth.
As mentioned earlier, a report from the U.S. Labor Department revealed that consumer prices climbed 0.7 percent in June compared to the previous month. Economists had projected an advance of about 0.6 percent.
Compared to the same period last year, consumer prices were down 1.4 percent, the largest year-over-year decline since 1950.
Core prices, which exclude the volatile food and energy sectors, advanced 0.2 percent compared to the previous month. Economists had expected an increase of 0.1 percent.
Meanwhile are report from the New York Fed said its general business conditions index rose to a negative 0.6 in July from a negative 9.4 in June, with a negative reading indicating a contraction in activity. Economists had been expecting a more modest increase to a reading of negative 5.0.
Data from the Federal Reserve showed that industrial production fell 0.4 percent in June following a revised 1.2 percent decrease in May. Economists had expected production to fall by 0.6 percent compared to the 1.1 percent drop originally reported for the previous month.
With the slowdown, industrial production fell at its slowest pace since the 1.3 percent jump that was seen in October of 2008.
In overseas trading, stock markets across the Asia-Pacific region saw another day of gains on Wednesday, with Hong Kong's Hang Seng Index climbing by 2.1 percent. Japan's benchmark Nikkei 225 Index edged up by a more modest 0.1 percent.
The major European markets closed on the upside for the third session in a row, with the German DAX Index and the French CAC 40 Index closing up by 3.1 percent and 2.9 percent, respectively. The U.K.'s FTSE 100 Index also moved higher, climbing by 2.6 percent.
In the bond markets, treasuries are seeing notable weakness amid the rally on Wall Street. Subsequently the yield on the benchmark ten-year note is trading at 3.528 percent, representing a gain of 8.1 basis points.
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