RTTNews - After moving higher at the open, stocks are seeing modest gains in mid-morning trading on Monday, prompted by the day's earnings and news from CIT Group (CIT). Nonetheless, mixed data on leading economic indicators is limiting some optimism. The major averages are all in positive territory, looking to build on last week's run-up.
The Conference Board released a report showing that its index of leading economic indicators increased by more than expected in June, although both the coincident index and lagging index continued to decline.
The report showed that the leading indicators index increased by 0.7 percent in June following an upwardly revised 1.3 percent increase in May. Economists had expected the index to increase by 0.5 percent compared to the 1.2 percent increase originally reported for the previous month.
Earlier this morning, some trader concern regarding the bankruptcy of CIT Group was alleviated, as the lending giant secured $3 billion in financing from some of its largest bondholders.
In earnings news, Halliburton Co. (HAL), M&T Bank Corp. (MTB), Hasbro (HAS) and Johnson Controls (JCI) all reported quarterly results that largely exceeded Wall Street expectations, bolstering trader optimism.
Meanwhile, Texas Instruments (TXN), Boston Scientific Corporation (BSX), and Legg Mason (LM) are scheduled to report after the markets close.
Also today, the focus of the broader markets may turn to Atlanta Federal Reserve Bank President Dennis Lockhart's speech on the economic outlook, set to take place at the Rotary Club of Nashville at 1:30 p.m. ET.
In other news, Human Genome Sciences (HGSI) reported positive results from one of the two phase III studies of its investigational lupus drug Benlysta. The stock has skyrocketed by 188 percent, leading the biotech sector higher by a substantial margin.
The major averages have moved to the downside in recent trading but currently remain in the green. The Dow is currently up 26.75 at 8,770.69, the Nasdaq is up 5.36 at 1,891.97 and the S&P 500 is up 1.51 at 941.89.
Resource stocks are posting strong gains, with the sector being led by the performance of gold stocks. The NYSE Arca Gold Bugs Index is up by 2.9 percent, helped by shares of Gold Star Resources (GSS), which are climbing by 4.5 percent. With the move, Gold Star reached its best intraday price in nearly seven weeks earlier in the session.
The advance by gold stocks is being helped by a surge in the price of the precious metal on the NYMEX, where it has jumped by $17.10 to $954.60 an ounce.
Railroad and commercial real estate stocks are also seeing strong gains, with the Dow Jones Railroad Index and the Morgan Stanley Real Estate Index up by 2.2 percent and 2 percent, respectively.
While the commercial real estate index is offsetting some of the losses posted on Friday, the railroad index is seeing its eighth straight day of gains, rising to its best intraday level in over six months.
While airline, brokerage and housing stocks are also advancing, modest weakness is visible among tobacco and health insurance stocks. The NYSE Arca Tobacco Index and the Morgan Stanley Healthcare Payor Index are both down 1 percent.
Notably, the tobacco index has snapped its recent three-day winning streak and is backing off of a roughly one-month high.
Stocks Driven By Analyst Comments
Shares of Peabody Energy (BTU) are on the rise in mid-morning trading after being upgraded at FBR Capital from Market Perform to Outperform. The broker also raised its target price on the stock from $36 to $44. The day's 3.4 percent gain has lifted the stock to its best intraday price in just over five weeks.
Elan (ELN) is also gaining, following an upgrade at UBS, which raised its rating on the stock to Buy from Neutral. The stock is up by 5.6 percent, with shares of the biotechnology specialist resuming their upward move after Friday's breather.
On the other hand, Infinera (INFN) is plunging after Jeffries & Co. downgraded the stock to Underperform from Hold, while lowering its target price from $8 to $6.75 based on recent valuation. Shares of the optical communications specialist have plummeted by 15.8 percent, falling to their worst intraday price in well over three months.
In overseas trading, stock markets across the Asia-Pacific region closed on the upside Monday, with Hong Kong's Hang Seng Index surging up by 3.7 percent while South Korea's benchmark KOSPI Index posted a gain of 2.7 percent.
The major European markets are also moving higher, with the German DAX Index and the French CAC 40 Index advancing by 1.2 percent and 0.9 percent, respectively. The U.K.'s FTSE 100 Index is posting a gain of 1.3 percent.
In the bond markets, treasuries are seeing some weakness amid the modest advance in the equity markets. Subsequently, the yield on the benchmark ten-year note is trading at 3.661 percent, posting a gain of 1 basis point.
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