After showing a lack of direction earlier in the session, stocks are moving mostly higher in mid-afternoon trading on Friday. Nonetheless, buying interest has remained somewhat subdued, limiting the upside for the markets.
In an interview with RTT News, Robert Pavlik, chief market strategist at Banyan Partners discussed the market's sluggish trading today, suggesting it's in a consolidation phase, although he said he is quite positive moving forward.
Pavlik said, We're encouraged and we're optimistic and we think this market has more room to run.
In fact, Pavlik predicts the S&P will get to the 910 range, with an upside of 1,000 before he may take some profits off the table. This is a prime time to get involved with stocks if you haven't been, stressed Pavlik.
In speech earlier in the day, Federal Reserve Chairman Ben Bernanke offered his support to financial innovation, despite the fact that some of these new products have contributed to the current economic crisis. Bernanke argued that increased regulation would be a better response than eliminating innovation.
Speaking at the Federal Reserve System's Sixth Biennial Community Affairs Research Conference in Washington, D.C., Bernanke noted that while financial innovation can misfire, more often the benefits outweigh the downside.
Financial innovation has improved access to credit, reduced costs, and increased choice, he said in prepared remarks. We should not attempt to impose restrictions on credit providers so onerous that they prevent the development of new products and services in the future.
In corporate news, General Electric (GE) reported first-quarter earnings from continuing operations that beat analysts' expectations and pleased investors. Additionally, Citigroup (C) reported a first-quarter loss available to common shareholders that shrank significantly to $0.18 per share. Analysts expected the company to report a loss of $0.34 per share.
Meanwhile, General Motors (GM) CEO Fritz Henderson said it was more probable that the auto giant would need to seek bankruptcy protection in order to complete its restructuring process, although he noted that isn't the company's preferred option.
On the economic front, the Reuters/University of Michigan's consumer sentiment index for April rose to 61.9, a substantial increase from the previous reading. Analysts had expected the index to rise to 58.5 from 57.3 in March.
The major averages are currently hovering in positive territory, holding onto moderate gains. The Dow is currently up 35.60 at 8,161.03, the Nasdaq is up 6.24 at 1,676.68 and the S&P 500 is up 6.98 at 872.28.
While the Dow is posting a modest gain on the session, steep losses by General Motors and Citigroup are limiting the upside for the blue chip index.
On the upside, one of the best performances is being shown by American Express (AXP), which is posting a gain of 6.4 percent on the day. With the advance, the stock has climbed to its highest level in over four months.
Bank of America (BAC) has also shown a strong upward move, reflecting strength in the banking sector. Shares of Bank of America are currently up 6.2 percent on the day.
The gain currently being shown by the Dow also reflects strong gains by Procter & Gamble (PG), McDonald's (MCD), and Pfizer (PFE). Additionally, GE is up 1.8 percent following its positive earnings news.
At the other end of the spectrum, General Motors is down 3.6 percent following the comments from its CEO, while Citigroup is currently posting a 6.2 percent loss.
Notable loses by Microsoft (MSFT), Intel (INTC), and 3M (MMM) are also limiting the upside for the Dow.
Following some earlier uncertainty, the momentum of the major sectors has moved notably positive over the course of the trading day.
Banking stocks are showing some of the best performances of the session, helping to push the Kbw Bank Index up 4.9 percent. With the advance, the index has moved to its highest level since mid-January, just over three months.
Housing, railroad, and real estate stocks are also seeing considerable strength, with the Philadelphia Housing Index up 4.3 percent, while the Dow Jones Railroads Index and the Morgan Stanley REIT Index posting gains of 3.5 percent and 3.3 percent, respectively.
Meanwhile, gold stocks continue to post notable losses, dragging the Amex Gold Bugs Index down 4.1 percent. The weakness in the sector comes as gold for June delivery closed down $11.90 at $867.90 an ounce.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Friday, benefiting from the strength seen on Wall Street overnight. Nonetheless, some late-day profit taking limited the upside for the markets.
The major European markets also closed higher, although off their best levels of the day. The U.K.'s FTSE 100 Index finished the session up 1 percent, while the French CAC 40 Index and the German DAX Index posted gains of 1.8 percent and 1.5 percent, respectively.
In the bond market, treasuries are holding near their lows of the session. Subsequently, the yield on the benchmark 10-year note has climbed 10.2 basis points to 2.932 percent.
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