RTTNews - Stocks have moved sharply higher over the course of morning trading on Wednesday, as traders react to the day's largely positive news on both the economic and earnings front. The major averages are all firmly in positive territory, looking to extend their gains for a third straight session.
On the earnings front, Intel (INTC) helped to bolster investor sentiment, beating analysts' second quarter earnings estimates. Abbott Labs (ABT) and Altera (ALTR) reported earnings that came in line with Wall Street estimates, while Yum! Brands (YUM) beat expectations.
Kicking off the day's influx of economic data was a U.S. Labor Department report that revealed that consumer prices climbed 0.7 percent in June compared to the previous month. Economists had projected an advance of about 0.6 percent.
Compared to the same period last year, consumer prices were down 1.4 percent, the largest year-over-year decline since 1950.
Core prices, which exclude the volatile food and energy sectors, advanced 0.2 percent compared to the previous month. Economists had expected an increase of 0.1 percent.
In a separate report, the New York Fed reported that conditions for New York manufacturers were roughly flat in July, with the index of activity in the sector rising to a level close to zero.
The New York Fed said its general business conditions index rose to a negative 0.6 in July from a negative 9.4 in June, with a negative reading indicating a contraction in activity. Economists had been expecting a more modest increase to a reading of negative 5.0.
Another report from the Federal Reserve indicated a continued decrease in industrial production in the month of June, although the rate of decline slowed by more than economists had been anticipating.
In the past few minutes, the major averages have edged down off their highs for the session, although they continue to post standout gains. The Dow is currently up 156.06 at 8,515.55, the Nasdaq is up 44.04 at 1,843.77 and the S&P 500 is up 16.39 at 922.23.
Resource stocks are seeing strength for another session, with steel and gold stocks posting notable gains. The NYSE Arca Steel Index and the NYSE Arca Gold Bugs Index are up by 5 percent and 4.7 percent, respectively. The indices are seeing their third straight session of gains.
Gold stocks have been boosted by an increase in the price of the precious metal on the NYMEX, where it has jumped by $16.90 to $939.70 per ounce.
Semiconductor stocks are also surging, as reflected by the 4.3 percent gain being shown by the Philadelphia Semiconductor Index. The index is rising for the fifth straight session, reaching its best intraday level in over a month earlier in the day.
Boosting the tech sector were second quarter earnings results from Intel. The firm reported a net loss for the second quarter due to an antitrust fine from the European Union, but it reported adjusted earnings of $0.18 per share compared to analyst estimates of $0.08 per share.
The better than expected earnings from Intel are contributing to strength throughout the tech sector, with networking, wireless and software stocks posting notable gains.
Further, housing, railroad and banking stocks are also showing strong upward moves, representing the day's broad based rally. On the other hand, trucking stocks are bucking the uptrend by the broader markets.
Stocks Driven By Analyst Comments
Shares of Alcatel-Lucent (ALU) are on the rise in mid-morning trading after being upgraded by Bank of America/Merrill Lynch to Buy from Neutral. The broker said the stock was oversold and cited expectations of improvement in the firm's operating margins as a reason for the update.
Alcatel-Lucent is currently up by 13 percent, moving further off of last week's three-month closing low and reaching a two-week intraday high.
Homebuilder D.R. Horton (DHI) is also advancing following an upgrade at Stifel Nicolaus, which raised its rating to Hold from Sell. The stock is up by 5 percent, extending its move away from the nearly four-month closing low set last week.
In overseas trading, stock markets across the Asia-Pacific region saw another day of gains on Wednesday, with Hong Kong's Hang Seng Index climbing by 2.1 percent. Japan's benchmark Nikkei 225 Index edged up by a more modest 0.1 percent.
The major European markets are also on the rise, with the German DAX Index and the French CAC 40 Index rising by 2.3 percent and 2.4 percent, respectively. The U.K.'s FTSE 100 Index is also moving higher, climbing by 2.2 percent.
In the bond markets, treasuries are seeing notable weakness amid the rally on Wall Street. Subsequently the yield on the benchmark ten-year note is trading at 3.528 percent, representing a gain of 8.1 basis points.
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