RTTNews - Following a shaky start to the session, stocks turned have moved sharply higher and are firmly positive in early afternoon trading on Monday. The major averages are all in the green by notable margins, although trading activity has been somewhat subdued.
The light volume has come as some traders have remained on the sidelines ahead of the release of some key economic figures later in the week. Traders are looking ahead to data on home prices, consumer confidence, manufacturing and employment.
Amid a light day on the economic front, the sentencing of Bernard Madoff for his $65 billion Ponzi scheme has drawn some attention, with Madoff receiving the maximum sentence of 150 years in prison.
Despite arguments from his defense and words from the former financier himself that he was truly sorry, Judge Denny Chin ensured that Madoff would spend the rest of his life in jail.
The major indices have been largely rangebound in recent trading, hovering near their best levels of the day. The Dow is currently up 87.13 at 8,525.52, the Nasdaq is up 11.90 at 1,850.12 and the S&P 500 is up 7.90 at 926.80.
Oil stocks are continuing their strong performance, with the NYSE Arca Oil Index rising by 1.3 percent. The upward move is helping the index to move further away from the nearly two-month closing low set last Monday.
The gains by oil stocks come amid a notable increase by the price of oil, with crude for August delivery currently up $1.93 at $71.09 a barrel. The price increase comes as continued violence in Nigeria has added to supply concerns.
Strength is also visible among software stocks, with the NYSE Arca Software Index currently up 1.5 percent on the day. Despite the strong gain, the index continues to be stuck within its June trading range.
Additionally, housing, retail and banking stocks are seeing notable upside on the session. Specifically, the 1.4 percent gain being shown by the Kbw Bank Index can be attributed in part to a 4.9 percent jump by shares of M&T Bank (MTB). The upward move has lifted M&T to its best intraday price in over one month.
Meanwhile, railroad stocks are turning in some of the day's worst performances, with the Dow Jones Railroad Index sliding 1.3 percent.
Stocks In The News
Shares of Teppco (TPP) are on the rise following news that the firm will merge with Enterprise Products Partners (EPD) and Enterprise GP Holdings L.P. (EPE) to form a publicly traded energy partnership with an enterprise value of more than $26 billion. Teppco stock is up by 5.6 percent in afternoon trading after rising to a three week intraday high earlier in the session.
Microsoft (MSFT) is also climbing after the Financial Times reported that the software giant plans to sell its digital advertising agency, Razorfish, hiring Morgan Stanley (MS) to identify a potential buyer. Shares of Microsoft are up by 2.5 percent, attempting to resume the upward move seen in the first half of June.
On the other hand, Watson Wyatt Worldwide (WW) is sliding following news that it will merge with Towers, Perrin, Forster & Crosby Inc. to form a new, publicly listed company called Towers Watson & Co. Based on the closing price of Watson Wyatt common stock on June 26, 2009, the implied equity value of the transaction is about $3.5 billion. Shares of Wyatt are down by 7.6 percent, falling to their worst intra-day price in a month.
In Focus: Earnings On Tap, Corporate News
On the earnings front, tax consulting service provider H & R Block (HRB) is slated to release financial results for the fourth quarter later today, with analysts expecting the company to report EPS of $2.05 for the quarter.
Apollo Group (APOL) is also due to release its third quarter results after the close of trading, with the education company expected to earn $1.12 per share.
In other news, Northrop Grumman (NOC) is seeing some strength after it received a contract along with Cobham Intercoms LLC for the supply of an upgraded vehicle intercom system from the U.S. Army. The contract is valued at $2.4 billion.
In overseas trading, stock markets across the Asia-Pacific region ended Monday's session on the downside. Japan's benchmark Nikkei 225 Index closed down 1 percent, while Hong Kong's Hang Seng Index slid 0.4 percent.
Meanwhile, the major European markets closed notably higher, with the German DAX Index and French CAC 40 Index rising 2 percent and 2.3 percent, respectively, while the U.K.'s FTSE 100 Index closed up 1.3 percent.
In the bond market, treasuries have seen choppy trading, recently drifting into positive territory. Subsequently, the yield on the benchmark ten-year note is trading at 3.477 percent, a drop of 2.9 basis points on the day.
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