Stocks are seeing considerable strength in early afternoon trading on Wednesday, with the major averages hovering firmly in positive territory after turning higher over the course of the morning. Adding to a strong gain from the previous session, the Nasdaq has offset Monday's steep loss.

While stocks initially moved lower amid a negative reaction to the latest batch of earnings news, selling pressure waned not long after the open. The major averages subsequently bounced well off their lows, mirroring the rebound seen on Tuesday.

The turnaround that was seen in the previous session was partly due to upbeat comments from Treasury Secretary Timothy Geithner, who told the Congressional Oversight Panel that the vast majority of U.S. banks have enough capital.

Speaking to the Economics Club of Washington earlier today, Geithner hinted that policymakers might be forced to alter their recovery strategies as the global financial crisis drags on.

He explained that the revised estimate from the International Monetary Fund for global growth could spark a change in policy. The IMF lowered its 2009 outlook, now predicating a contraction of 1.3 percent for the year compared to its previous estimate of 0.5 percent growth.

We may have to adapt our policies further as conditions evolve, and we need to make sure we provide a scale of support that matches the intensity of the challenge, Geithner said.

On the corporate front, Morgan Stanley (MS) reported a much wider than expected first quarter loss of $0.57 per share and revealed that it has slashed its quarterly dividend by 80 percent to $0.05 a share.

Meanwhile, Boeing (BA) reaffirmed its full year revenue guidance but lowered its earnings guidance due to lower earnings at its commercial airplanes business.

In other earnings news, fast food giant McDonald's (MCD) reported first quarter net income of $0.87 per share compared to $0.81 per share in the same quarter of last year, while analysts expected the company to report earnings of $0.82 per share.

The major averages have moved off their best levels of the day in recent trading, although they are currently holding onto notable gains. The Dow is currently up 38.79 at 8,008.35, the Nasdaq is up 26.78 at 1,670.63 and the S&P 500 is up 7.58 at 857.66.

Sector News

Most of the major sector indices have moved higher over the course of the trading, reflecting the rebound by the broader markets. Electronic storage stocks are turning in some of the best performances, pushing the Amex Disk Drive Index up 5.3 percent on the day.

Within the index, SanDisk (SNDK) is helping to lead the storage sector higher, rising 13 percent in response to better-than-expected adjusted quarterly results. With the advance, the stock has risen to its highest level in over six months.

SanDisk reported an adjusted first quarter loss of $0.48 per share compared to a profit of $0.21 per share in the year-ago quarter, although the loss was narrower than the loss of $0.76 per share that was expected by analysts.

Trucking, semiconductor, and housing stocks are also holding onto strong gains, with the Dow Jones Trucking Index up 6.6 percent, while the Philadelphia Semiconductor Index and the Philadelphia Housing Index are up 4.7 percent and 4.2 percent, respectively.

While significant strength also remains visible among steel, networking, and retail stocks, some real estate and pharmaceutical stocks are bucking the uptrend. The Morgan Stanley REIT Index is currently down 2.3 percent, while the Amex Pharmaceutical Index is down 1.9 percent.

Stocks In The News

Among individual socks, Wolverine World Wide Inc. (WWW) is soaring 14.2 percent after the footwear maker reported better than expected adjusted earnings for the first quarter. With the advance, the stock has risen to its best intraday level in over five months.

While Wolverine said its net income for the quarter fell to $0.21 per share from $0.46 per share in the year-ago quarter, the company reported adjusted earnings of $0.44 per share. On average, analysts expected the company to report earnings of $0.31 per share.

Additionally, Wells Fargo (WFC) is up 3.6 percent after the company reported first quarter net income of $0.56 per share, compared to $0.60 per share in the same quarter of last year. Analysts expected the company to report earnings of $0.41 per share for the quarter.

Meanwhile, Genzyme Corp. (GENZ) is posting a loss of 5.2 percent after its adjusted first quarter earnings missed estimates and its reaffirmed full year earnings guidance fell short of what analysts are anticipating.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. While notable strength was visible in South Korea, the markets in Hong Kong and mainland China experienced considerable weakness.

Meanwhile, the major European markets are holding near their highs of the day, well within positive territory. The U.K.'s FTSE 100 Index is up 1.1 percent, while the French CAC 40 Index and the German DAX Index are posting gains of 1.7 percent and 2.1 percent, respectively.

In the bond markets, treasuries have come off their lows of the day but remain well below the unchanged line. Subsequently, the yield on the benchmark 10-year note is up 2.3 basis points at 2.925 percent after reaching a high of 2.966 percent.

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