Stocks have shown a strong upward move over the course of morning trading on Monday, with the major averages all moving firmly into positive territory. Better than expected economic data has helped to drive stocks sharply higher.
Not long after the open, the National Association of Realtors released a report showing a notable increase in pending home sales in March. The increase came as many first-time buyers are taking advantage of historically good housing affordability conditions.
The report showed that NAR's pending home sales index rose 3.2 percent in March following a downwardly revised 2.0 percent increase in February. Economists had expected the index to come in unchanged following the 2.1 percent increase originally reported for the previous month.
The index is seen as an indicator of future housing market activity, with a pending home sale one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Separately, the Commerce Department released a report showing an unexpected increase in construction spending, which rose 0.3 percent in March following a 1.0 percent decrease in February. Economists had expected spending to fall by about 1.6 percent.
The better than expected economic data has generated considerable buying interest, although some traders continue to express uncertainty about the release of the results of the government's stress tests of the nation's largest financial institutions.
In other news, shares of Sprint Nextel (S) have shown a strong upward move after the telecom giant reported a wider first quarter loss compared to the year-ago period but reported an unexpected adjusted profit. Sprint Nextel is currently up 14.4 percent.
Sprint Nextel reported a net loss for the quarter of $594 million or $0.21 per share compared to a loss of $505 million or $0.18 per share in the year-ago quarter. Excluding items, the company earned $0.03 per share compared to analyst estimates of a loss of $0.05 per share.
The major averages have seen some further upside in recent trading, rising to new highs for the session. The Dow is currently up 156.51 at 8,368.92, the Nasdaq is up 26.62 at 1,745.82 and the S&P 500 is up 17.21 at 894.73.
Benefiting from the better than expected pending home sales data, housing stocks are turning in some of the market's best performances in morning trading. The Philadelphia Housing Index is currently up 5.3 percent after showing a notable decline last week.
M/I Homes (MHO) is helping to lead the housing sector higher, with the homebuilder currently up 15.6 percent. With the gain, shares of M/I Homes have risen to their best intraday level in over six months.
Banking stocks are also seeing considerable strength, pushing the Kbw Bank Index up 5.5 percent. The strength in the sector comes ahead of the release of the results of the government's stress tests later in the week.
Significant strength is also visible among steel stocks, as reflected by the 5.8 percent gain currently being shown by the Amex Steel Index. The strength in the sector may be partly due to the release of some better than expected Chinese economic data.
Most of the other major sectors are also showing strong upward moves, reflecting broad based strength in the markets. Transportation, oil service, and gold stocks are posting notable gains.
Stocks Driven By Analyst Comments
After seeing considerable weakness last month, shares of Burger King (BKC) are showing a strong move back to the upside in morning trading. The fast food giant is currently up 6.1 percent, moving further off the two-year closing low it set last Thursday.
The gain by Burger King comes after Merrill/Bank of America upgraded its rating on the company's stock to Neutral from Buy. The analysts said that shares of Burger King look inexpensive on an earnings basis, relative to its peers.
Shares of Urban Outfitters (URBN) have also shown a strong upward move after Pali Research upgraded its rating on the retailer to Buy from Neutral. Urban Outfitters is currently up 5.2 percent after reaching a nearly five-month intraday high.
On the other hand, shares of Adobe Systems (ADBE) are currently down 4.1 percent after UBS downgraded its rating on the software developer to Neutral from Buy. The loss by Adobe also comes after it ended Friday's trading at its best closing level in about six months.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Monday, benefiting from a report showing an expansion in Chinese manufacturing. The Japanese market remained closed for Greenery Day, a national holiday.
The major European markets are also moving higher, although the market in London remains closed due to a holiday. The French CAC 40 Index and the German DAX Index are currently up 2.1 percent and 1.5 percent, respectively.
In the bond market, treasuries have turned lower after seeing some strength earlier in the session. Subsequently, the yield on the benchmark ten-year note is currently up 1 basis point at 3.184 percent after hitting a low of 3.155 percent.
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