RTTNews - Stocks are hovering near their best levels of the day in mid-afternoon trading on Tuesday following some positive news on the earning front. The major averages are all in positive territory, holding onto strong gains after showing a notable upward move in morning trading.

Buying interest was boosted early on by a set of positive earning reports, with Home Depot (HD), Saks (SKS) and Target (TGT) all exceeding Wall Street estimates on the bottom line, although their revenues fell short of estimates.

After the closing bell today, Dow component Hewlett-Packard (HPQ) and Analog Devices (ADI) are among the companies that are due to release their quarterly results.

Traders have largely shrugged off a report from the Commerce Department showing an unexpected decrease in housing starts in the month of July. The decrease came as a drop in new construction of multi-family homes more than offset a modest increase in new construction of single-family homes.

Also on the economic front, the Labor Department said that producer prices fell by a much more substantial margin than originally expected. Core prices also edged lower, while economists had expected the figure to tick higher.

The major averages have seen some further upside in recent trading, reaching new highs for the session. The Dow is currently up 92.20 at 9,227.54, the Nasdaq is up 26.77 at 1,957.61 and the S&P 500 is up 10.92 at 990.65.

Dow Components

A majority of the Dow components are in positive territory, contributing to the solid gain being shown by the blue chip index in mid-afternoon trading.

American Express (AXP) is helping to lead the Dow higher, advancing by 4.3 percent. With the gain, the stock is bouncing off of a two-week closing low set on Monday.

The upward move by AmEx comes after Keefe, Bruyette & Woods upgraded the stock to Outperform from Market Perform. The broker also raised its target price to $37 from $33.

Alcoa (AA) and Caterpillar (CAT) are also on the rise, posting gains of 4.3 percent and 2.9 percent, respectively. The stocks are also recovering from two-week closing lows set in the previous session.

Home Depot is also moving off of a two week closing low, recording gain of 3.5 percent. The rebound comes after the firm reported adjusted second-quarter net income of $0.64, beating Wall Street estimates of $0.59 per share for the quarter, while also raising its full year guidance.

JP Morgan Chase (JPM), Bank of America (BAC) and Travelers (TRV) among others are also helping the Dow, while Boeing (BA) is disappointing with a 0.7 percent pullback. The stock is extending its losses, poised to set at a fresh two-week closing low. Merck (MRK) and Coca-Cola (KO) are also posting modest losses.

Sector News

While networking, steel and banking stocks are extending their strong performances, notable strength is also visible among commercial real estate stocks.

The Morgan Stanley REIT Index is up by 1.8 percent, bouncing off Monday's two-week closing low. The index is being helped by shares of Ashford Hospitality Trust (AHT), which are up by 5.9 percent after ending the previous session at a one-month closing low.

Trucking, oil service, electronic storage and brokerage stocks are also moving notably higher along with most of the other major sectors, reflecting the day's broad based strength.

Meanwhile, modest weakness remains visible in the health insurance sector, as the White House has sought to reassure supporters that it is still pushing for a public option as part of health care reform. Over the weekend, comments from some administration officials suggested that President Obama was giving up on including a public option.

In Focus: Earnings & Economic News

As mentioned above, Saks posted a second quarter net loss of $0.39 per share, while analysts had forecast a loss of $0.52 per share. Meanwhile, revenues came in at $561.70 million, which fell short of the expected $562.98 million for the quarter.

Meanwhile, data from the Commerce Department showed that housing starts fell 1.0 percent to an annual rate of 581,000 in July from the revised June estimate of 587,000. Economists had expected starts to rise to 598,000 from the 582,000 originally reported in the previous month.

In a separate report, the Labor Department revealed that producer prices dropped 0.9 percent in July following a 1.8 percent increase in the previous month. Economists had expected the measure to slip 0.3 percent for the month.

Core prices, which exclude the volatile food and energy sectors, ticked down 0.1 percent in July. Economists were looking for core prices to edge up by 0.1 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished on a mixed note Tuesday. Japan's benchmark Nikkei 225 Index rose by 0.2 percent, while Australia's All Ordinaries Index fell 0.3 percent.

Meanwhile, the major European markets all ended the day higher, with the French CAC 40 Index and the U.K.'s FTSE 100 Index rising by 0.6 percent and 0.5 percent, respectively, while the German DAX Index finished up by 0.7 percent.

In the bond markets, treasuries are seeing some weakness amid the strength visible on Wall Street. Subsequently, the yield on the benchmark ten-year note is trading at 3.518 percent, posting a gain of 2.7 basis points.

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