Stocks Continue To Move Higher In Mid-Day Trading - U.S. Commentary

(RTTNews) - With traders reacting positively to upbeat economic data, stocks have moved notably higher during trading on Friday. The gains on the day are extending Wednesday's rally, with the Dow and the S&P 500 reaching new record highs.

The major averages have seen some further upside in recent trading, reaching new highs for the session. The Dow is up 91.32 points or 0.6 percent at 16,270.40, the Nasdaq is up 42.23 points or 1 percent at 4,100.37 and the S&P 500 is up 11.70 points or 0.7 percent at 1,821.30.

The strength on Wall Street comes on the heels of the release of a report from the Commerce Department showing that the U.S. economy grew faster than previously estimated in the third quarter.

The Commerce Department said gross domestic product increased by an upwardly revised 4.1 percent in the third quarter compared to the 3.6 percent growth estimated earlier this month.

The upward revision came as a surprise to economists, who had widely expected the pace of GDP growth to be unrevised.

The report has added optimism that the economic momentum is strong enough to withstand the Federal Reserve's recently announced decision to begin scaling back its stimulus program.

When announcing its decision to taper its asset purchases by $10 billion per month, the Fed noted that it has seen indications of growing underlying strength in the broader economy.

Sal Guatieri, Senior Economist at BMO Capital Markets, said, "The strong Q3 growth performance vindicates the Fed's decision to begin tapering QE3."

"It also suggests the economy is poised for stronger growth in the new year than the middling 2.0% pace of the past year, meaning the tapering process will continue," he added.

Among individual stocks, shares of Responsys (MKTG) have surged up by 38.7 percent after the cloud-based marketing software company agreed to be acquired by Oracle (ORCL) for approximately $1.5 billion in cash.

Open-source software company Red Hat (RHT) is also turning in a strong performance after reporting better than expected third quarter results.

Meanwhile, shares of Swift Transportation (SWFT) have come under pressure after the trucking company lowered its fourth quarter earnings guidance.

Sector News

Computer hardware stocks have shown a strong move to the upside on the day, driving the NYSE Arca Computer Hardware Index up by 1.7 percent. The gain extends a recent upward trend by the index, which has reached a new record high.

Seagate Technology (STX) and Lexmark (LXK) are turning in two of the hardware sector's best performances, jumping by 4 percent and 3.9 percent, respectively.

Significant strength has also emerged among networking stocks, as reflected by the 1.5 percent gain being posted by the NYSE Arca Networking Index. With the gain, the index has reached its best intraday level in over two years.

Housing stocks are also turning in a strong performance in mid-day trading, with the Philadelphia Housing Sector Index up by 1.4 percent. The index is on pace to end the day at a six-month closing high.

Biotechnology, electronic storage, and utilities stocks are also seeing considerable strength, reflecting broad based buying interest.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance during trading on Friday. Japan's Nikkei 225 Index edged up by 0.1 percent, while Hong Kong's Hang Seng Index fell by 0.3 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index advanced by 0.7 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index and the rose by 0.4 percent and 0.3 percent, respectively.

In the bond market, treasuries are regaining some ground after coming under pressure over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.9 basis points at 2.896 percent.