RTTNews - Stocks are posting strong gains in mid-morning trading on Wednesday, as traders remain largely optimistic despite a mixed batch of economic data. The major averages are all in positive territory by notable margins, looking to snap a streak of uninspiring performances.
Early optimism was generated by a report from the Commerce Department showing that durable goods for May rose by 1.8 percent, matching a revised increase in April. The increase surprised economists, who had expected a decline of 0.9 percent.
However, a separate report from the Commerce Department showed that new home sales slipped by 0.6 percent to an annual rate of 342,000 in May from a revised April rate of 344,000. Economists had expected sales to jump 2.3 percent to 360,000 from the 352,000 originally reported for the previous month.
This afternoon, the results of the Federal Reserve's 2-day meeting are likely to drive the markets, as traders will digest near-term monetary policy and comments regarding the current economic climate.
On the corporate front, troubled banking giant Citigroup (C) intends to raise workers' base salaries by as much as 50 percent this year to offset smaller annual bonuses, the New York Times reported, citing parties with direct knowledge of the plan.
Meanwhile, General Motors is reportedly planning to cut another 4,000 U.S. white-collar jobs by October 1, 600 more than it earlier announced, as part of an accelerated plan to shrink its work force.
In earnings news, Oracle (ORCL) said Tuesday after the markets closed that its fourth quarter profit fell about 7 percent from last year, as a stronger U.S. dollar ate into its sales. Nonetheless, the results beat analyst estimates, and shares of Oracle are up 7.4 percent on the news.
Contract electronics manufacturer Jabil Circuit (JBL) reported a third quarter net loss due to restructuring and impairment charges and lower revenues. The company's fourth quarter revenue forecast was also lower than analyst estimates. Nonetheless, the stock is currently up 7.2 percent.
In recent trading, the major averages have pulled back off their highs for the session, although they remain firmly positive. The Dow is currently up 84.64 at 8,407.55, the Nasdaq is up 35.33 at 1,800.25 and the S&P 500 is up 12.70 at 907.80.
Most of the major sectors have shown strong upward moves, helping the major averages to post solid gains on the day.
Transportation stocks are seeing some of the day's strongest performances, with the Dow Jones Transportation Average currently up 3.4 percent. With the advance, the average is moving further off the nearly one-month closing low set on Monday.
Continental Airlines (CAL) is helping to lead the transportation sector higher, with the airline currently up 5.5 percent. The gain has lifted shares of Continental well off the three-month closing low set in the previous session.
Despite the drop in new home sales, housing stocks are also posting particularly strong gains, driving the Philadelphia Housing Index up 3.5 percent. Radian Group (RDN) is leading the sector to the upside, rising 20.3 percent.
Significant strength is also visible in a variety of other sectors, with steel, healthcare provider, semiconductor and real estate stocks posting notable gains.
Stocks Driven By Analyst Comments
Shares of Black & Decker (BDK) are on the rise after an upgrade by Credit Suisse to Neutral from Underperform, with the broker citing the firm's adjusted cost structure and change in valuation. The stock is up by 4.2 percent, moving off of the three-month closing low set in the previous session.
Atlas Pipeline (APL) is also climbing following an upgrade by Barclays Capital, which raised its rating on the stock to Equal Weight from Underweight based on commodity prices. Shares of the resource gathering firm are up by 14 percent, bouncing off of a three-week low.
On the other hand, Harmonic (HLIT) is sliding after being downgraded to Hold from Buy by Jefferies, which also reduced its price target to $6 from $8, citing a likely decline in revenue. The stock is down by 7.8 percent, falling to its lowest intraday level since late May earlier in the session.
In overseas trading, stock markets across the Asia-Pacific region ended Wednesday's session on the upside. Japan's benchmark Nikkei 225 Index closed up 0.4 percent, while Hong Kong's Hang Seng Index jumped 2 percent.
The major European markets are also continuing to see considerable strength, with the French CAC 40 Index and the German DAX Index jumping by 2.5 percent and 2 percent, respectively, while the U.K.'s FTSE 100 Index is up by 1.2 percent.
In the bond markets, treasuries are showing modest weakness amid the buying interest seen in the equity markets. Subsequently, the yield on the benchmark ten-year note is trading at 3.658 percent, an increase of 1.8 basis points on the day.
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