RTTNews - Stocks are seeing some strength in mid-afternoon trading on Wednesday, posting moderate gains after a choppy start to the session. The major averages are all in positive territory, as traders are digesting the Obama administration's financial reform proposals.
Seeking to prevent a recurrence of the financial meltdown that brought the U.S. economy to its knees, President Barack Obama laid out a sweeping agenda for regulatory reform.
The president proposed granting the Federal Reserve the authority to scrutinize firms that are large enough to pose a systemic risk to the financial markets.
In addition, Obama called for the creation of an oversight council of existing federal regulators to share information, identify gaps in regulation and tackle issues that don't fit neatly into an organizational chart.
Obama also called for the creation of a new agency dedicated to looking out for the interests of consumers in the financial markets.
Earlier, traders digested a report on consumer prices from the Labor Department that showed a modest increase in the month of May, with the mild price growth coming in below the expectations of economists.
The major averages are currently holding in positive territory, although the Nasdaq is outperforming the Dow and the S&P 500. The Nasdaq is currently up 21.82 at 1,818, while the Dow is 25.39 at 8,530.06 and the S&P 500 is up 3.92 at 915.89.
Most of the Dow components are trading in positive territory, helping the blue chip index to offset some of the losses seen in the two previous sessions.
Shares of Home Depot (HD) are helping to the way higher, climbing by 2.9 percent. With the climb, the stock is bouncing off of its lowest closing level in over two weeks set in the previous session.
Pfizer (PFE) and Intel (INTC) are also on the rise, climbing by 3.7 percent and 2 percent, respectively, with both looking to claw back from recent losses.
Communications giant Cisco (CSCO) and entertainment firm Disney (DIS) have also seen considerable upside, bouncing off of the multi-week closing lows set on Tuesday.
On the other hand, General Electric (GE) is retreating by 3.7 percent and is poised to finish the day at its lowest level in seven weeks.
Further, shares of Alcoa (AA) and Chevron (CVX) are also in negative territory, dropping by 1.6 percent and 1.5 percent, respectively. With the move, the stocks are continuing to back off of multi-month highs set late last week.
Most of the major sectors are in positive territory, helping the major averages to extend their stay above the unchanged line.
Some of the strongest performers have emerged among health insurance stocks, with the Morgan Stanley Healthcare Payor Index up by 2.1 percent. The upward move is helping the index move further off its worst closing level in over six weeks.
Airline and telecommunications stocks are also on the rise, with the NYSE Arca Airline Index and the NYSE Arca Telecommunications Index up by 3.4 percent and 2.1 percent, respectively.
While pharmaceutical and retail stocks have also shown strength on the day, oil service and banking stocks are extending their weakness. The Philadelphia Oil Service Sector Index is down by 2.5 percent and the S&P Banks Index is down by 2.6 percent.
In Focus: Consumer Price Data, Earnings, Fed Buyback
Consumer price data from the Labor Department showed that prices edged up 0.1 percent in May after coming in unchanged in April. Economists had been expecting a somewhat more substantial increase in prices of about 0.3 percent.
Core consumer prices, which exclude food and energy prices, also edged up 0.1 percent in May following a 0.3 percent increase in April. The modest increase in core prices came in line with economist estimates.
On the earnings front, FedEx (FDX) reported fourth-quarter adjusted earnings of $0.64 per share, beating analyst estimates of $0.51 per share. However, the firm also forecast first quarter earnings ranging from $0.30 to $0.45 per share versus estimates of $0.68 per share.
The Federal Reserve continued its treasury buyback program Wednesday, completing its second quantitative easing move of the week. The New York Federal Reserve purchased $7.0 billion worth of securities with maturity dates ranging from May of 2016 to May of 2019.
The day's buyback saw a total of $26.2 billion in treasuries submitted for the purchase. Overall, the Fed has purchased a total of $169.97 billion since the program began on March 25th.
In overseas trading, stock markets across the Asia Pacific region ended Wednesday's trading on a mixed note. Japan's benchmark Nikkei 225 Index closed up 0.9 percent, while Hong Kong's Hang Seng finished down 0.5 percent.
Meanwhile, the major European markets all closed firmly in the red, with the French CAC 40 Index and the German DAX Index falling by 1.6 percent and 1.9 percent, respectively. The U.K.'s FTSE 100 Index also finished notably lower, dropping by 1.2 percent.
In the bond markets, treasuries continue to show strength but have backed well off of their best levels of the day. Subsequently, the yield on the benchmark ten-year note is trading at 3.634 percent, down by 4.0 basis points on the day.
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