RTTNews - Stocks have seen considerable volatility in morning trading on Tuesday, although they have remained mostly positive as traders react to news of the re-appointment of Ben Bernanke and economic data that firmly beat expectations. The major averages are all in positive territory, although they have backed well off of their best levels of the day.
Consumer confidence rebounded significantly in the month of August after seeing some deterioration in July, according to a report released by the Conference Board, with the increase partly due to an improvement in consumers' assessment of the job market.
The Conference Board said its consumer confidence index jumped to 54.1 in August from an upwardly revised 47.4 in July. Economists had been expecting the index to increase to 47.9 from the 46.6 originally reported for the previous month.
Earlier, trader sentiment was boosted by data from Standard and Poor's showing that the pace of decline in housing prices slowed by more than economists had been expecting.
The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 15.4 percent in June compared to a revised 17 percent drop in May. Economists had expected prices to fall 16.4 percent compared to the same month a year ago.
In other news, President Barack Obama officially nominated Ben Bernanke for a second term as Federal Reserve Chairman this morning at Martha's Vineyard, citing the Fed Chief's resiliency and creativity in handling the recent financial crisis.
Bernanke's term was set to expire at the end of January, and his reappointment will require Senate confirmation.
On the earnings front, Burger King Holdings (BKC) reported fourth-quarter net income of $0.43 per share, compared to $0.37 per share in the same quarter last year. Wall Street analysts expected the company to report earnings of $0.33 per share.
Burger King said total revenues for the fourth quarter fell 2 percent to $629.9 million from $645.7 million in same quarter last year. Twelve analysts had a consensus revenue estimate of $632.40 million for the quarter.
Specialty retailer Chico's FAS Inc. (CHS) announced that its adjusted second-quarter net income rose to $0.10 per share from $0.04 per share in the comparable period last year. Analysts expected the company to report earnings of $0.10 per share for the quarter.
Chico's said its net sales for the quarter rose to $419.9 million from $405.2 million in the year ago quarter. Thirteen analysts had a consensus revenue estimate of $416.70 million for the quarter.
The major averages have moved roughly sideways in recent trading, well off their highs but holding onto moderate gains. The Dow is currently up 51.77 at 9,561.05, the Nasdaq is up 8.78 at 2,026.76 and the S&P 500 is up 5.10 at 1,030.67.
Housing stocks are turning in a strong performance in mid-morning trading, as reflected by the 2.8 percent gain being shown by the Philadelphia Housing Sector Index. With the gain, the index was propelled to its best intraday level in nearly eleven months earlier in the session.
The index is being boosted by shares of Radian Group (RDN), which have jumped by 8 percent. The surge has lifted the stock to its highest intraday level in well over eighteen months.
Biotechnology and airline stocks are also seeing notably strength, with the NYSE Arca Biotechnology Index and the NYSE Arca Airline Index rising by 2.5 percent and 2.2 percent, respectively. The biotechnology index has reached a historic intraday high, while the airline index is poised to close at its best level in seven months.
While gold, retail, and financial stocks are also moving higher along with most of the other major sectors, weakness has emerged among oil service stocks, with the Philadelphia Oil Service Index sliding by 1.1 percent on the day. The index is retreating from its best closing level in over two months.
Stocks Driven By Analyst Comments
Warner Chilcott (WCRX) is moving higher in mid-morning trading after being upgraded at Jefferies & Co. to Buy from Hold. The broker also raised its target price on the stock to $26.50 from $18.
Warner Chilcott stock is up by 9.7 percent, building on the historic high reached in the previous session. The stock is seeing additional upside after entering an agreement with Procter & Gamble to purchase its drug division for $3.1 billion.
Costco (COST) is also seeing some upside following an upgrade at William Blair to Market Perform from Underperform based on valuation and a forecast in business stabilization. The stock has moved higher by 2.6 percent, but it remains stuck in a recent trading range.
On the other hand, Denbury Resources (DNR) is retreating after being downgraded by UBS from Buy to Neutral. The stock is sliding by 5.2 percent, continuing this month's choppy movement.
In overseas trading, stock markets across the Asia-Pacific region closed mostly lower on Tuesday. Japan's benchmark Nikkei 225 Index slid by 0.8 percent, while Hong Kong's Hang Seng Index fell by 0.5 percent.
Meanwhile, the major European markets are on the rise, with the German DAX Index and the French CAC 40 Index both rising by 0.8 percent, while the U.K.'s FTSE 100 Index is up by 0.4 percent.
In the bond markets, treasuries are continuing their choppy movement despite the day's positive economic indicators. The benchmark ten-year note is trading at 3.490, essentially unchanged on the session.
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