RTTNews - With traders reacting to news of the reappointment of Ben Bernanke and a string of positive economic reports, stocks are turning in a strong performance in early afternoon trading on Tuesday. The major averages are all in positive territory after ending yesterday's lackluster session nearly unchanged.
Buying interest was largely generated by data from research group the Conference Board, which reported that consumer confidence rebounded significantly in the month of August after seeing some deterioration in July. The increase was partly due to an improvement in consumers' assessment of the job market.
Trader sentiment was also boosted by data from Standard and Poor's showing that the pace of decline in housing prices slowed by more than economists had been expecting.
In other news, President Barack Obama officially nominated Ben Bernanke for a second term as Federal Reserve Chairman this morning, with the president praising the manner in which the Fed Chief handled the recent financial crisis.
On the earnings front, restaurant operator Burger King Holdings (BKC) and retailer Chico's FAS (CHS) reported earnings that surpassed analyst estimates on revenues that also bested forecasts, largely atypical of the most recent earnings season.
The major averages have moved to the upside in the past few minutes, although they currently remain off their best levels of the day. The Dow is currently up 93.94 at 9,603.22, the Nasdaq is up 18.72 at 2,036.70 and the S&P 500 is up 9.96 at 1,035.53.
Significant strength has emerged among airline stocks, with the NYSE Arca Airline Index advancing by 3.2 percent on the session. With the gain, the index is currently poised to end the session at its best closing level in seven and a half months.
Alaska Air Group (ALK) is helping to lead the sector higher, advancing 11.9 percent to its best intraday level in six months. The gains by airline stocks come amid a drop in oil prices, with crude for October delivery currently down by $0.58 to $73.79 per barrel.
Housing and biotechnology stocks are also on the rise, with the Philadelphia Housing Sector Index and the NYSE Arca Biotechnology Index both climbing 3.2 percent. The housing index was propelled to its best intraday level in nearly eleven months earlier in the session, while the biotechnology set a historic intraday high.
While commercial real estate, brokerage, gold and electronic storage stocks are also moving higher along with most of the other major sectors, modest weakness remains visible among oil service and natural gas stocks.
Stocks In The News
Corinthian Colleges (COCO) is moving higher after the company reported adjusted fourth quarter earnings of $0.31, beating estimates of $0.24 per share. Revenues also topped estimates, coming in at $353.51 compared to forecasts of $342.86 million. The stock has shot up by 11.5 percent on the news, rising to its best intraday level in nearly five months.
Big Lots (BIG) is also on the rise after reporting second quarter earnings of $0.34 per share, surpassing estimates of $0.30 per share on better than expected revenues. Shares of the discount retailer are advancing by 7.8 percent, climbing to their best level in almost four months.
On the other hand, Manitowoc (MTW) is retreating on news that CareFusion Corp. will replace it in the S&P 500 after the close of trading on August 31. The move comes as Manitowoc has a market capitalization below $900 million, ranking it 500th in the index. The stock is down by 5.8 percent, but it remains stuck in a recent range.
In Focus: Economic Data, Bernanke Re-Appointment, Earnings News
As mentioned above, the Conference Board said its consumer confidence index jumped to 54.1 in August from an upwardly revised 47.4 in July. Economists had been expecting the index to increase to 47.9 from the 46.6 originally reported for the previous month.
Lynn Franco, Director of the Conference Board Consumer Research Center said, Consumer confidence, which had posted back-to-back monthly declines, appears to be back on the mend.
In a separate report, Standard & Poor's said the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 15.4 percent in June compared to a revised 17 percent drop in May. Economists had expected prices to fall 16.4 percent compared to the same month a year ago.
Additionally, President Barack Obama announced the nomination of Ben Bernanke to a second term as Federal Reserve Bank Chairman.
Obama said, Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic freefall.
The president went on to say that the actions taken by the Bernanke and the Fed were done so out of necessity and helped to bring the economy back from the brink.
In earnings news, Burger King Holdings (BKC) reported fourth-quarter net income of $0.43 per share, compared to $0.37 per share in the same quarter last year. Wall Street analysts expected the company to report earnings of $0.33 per share.
Burger King said total revenues for the fourth quarter fell 2 percent to $629.9 million from $645.7 million in same quarter last year. Twelve analysts had a consensus revenue estimate of $632.40 million for the quarter. The stock has jumped by 7.6 percent, reaching a four and a half month high.
Chico's FAS Inc. (CHS) announced that its adjusted second-quarter net income rose to $0.10 per share from $0.04 per share in the comparable period last year. Analysts expected the company to report earnings of $0.10 per share for the quarter.
Chico's said its net sales for the quarter rose to $419.9 million from $405.2 million in the year ago quarter. Thirteen analysts had a consensus revenue estimate of $416.70 million for the quarter. Shares of the specialty retailer have surged up by 9.8 percent, setting a nearly twenty-two month intraday high.
In overseas trading, stock markets across the Asia-Pacific region closed mostly lower on Tuesday. Japan's benchmark Nikkei 225 Index slid by 0.8 percent, while Hong Kong's Hang Seng Index fell by 0.5 percent.
Meanwhile, the major European markets ended the day moderately higher, with the German DAX Index and the French CAC 40 Index closing up 0.8 percent and 0.6 percent, respectively, while the U.K.'s FTSE 100 Index climbed 0.4 percent.
In the bond markets, treasuries are continuing their choppy movement despite the day's positive economic indicators. The yield on the benchmark ten-year note is trading at 3.505 percent, rising by 1.1 basis points.
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