Stocks Continue To See Modest Strength In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving modestly higher earlier in the session, stocks continue to see some strength in mid-day trading on Friday. Buying interest has remained relatively subdued, however, limiting the upside for the markets.

The major averages have pulled back off their highs but are currently clinging to slim gains. The Dow is up 23.19 points or 0.1 percent at 17,073.94, the Nasdaq is up 16.05 points or 0.3 percent at 4,826.84 and the S&P 500 is up 0.98 points or 0.1 percent at 2,014.41.

The modest strength on Wall Street comes as traders continue to react positively to yesterday's release of the minutes of the latest Federal Reserve meeting.

The minutes showed that Fed members were concerned about global growth risks and decided it was prudent to wait for additional information before raising interest rates. Combined with recent jobs and trade data, the minutes helped reinforce the view that the Fed will not raise rates later this month and may delay its first rate hike into next year.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Admittedly, there are still two employment reports scheduled for release before the FOMC meets in December."

"But at this stage we think it would take a major turnaround in payroll growth, to well above 200,000 per month, to persuade officials to support a December rate hike," he added.

Nonetheless, traders seem somewhat reluctant to make any significant moves ahead of the release of earnings news from a number of big name companies next week.

Johnson & Johnson (JNJ), Intel (INTC), JP Morgan (JPM), Bank of America (BAC), General Electric (GE), Citigroup (C), and Netflix (NFLX) are among the companies due to report their results.

Aluminum giant Alcoa (AA) unofficially kicked off the earning season after the close of trading on Thursday, reporting third quarter results that came in below analyst estimates.

Sector News

Many of the major sectors are showing only modest moves on the day, although substantial strength remains visible among gold stocks. The NYSE Arca Gold Bugs Index has surged up by 5.4 percent and is on pace to set a nearly three-month closing high.

The rally by gold stocks comes amid an increase by the price of the precious metal, with gold for December delivery climbing $13.80 to $1,158.10 an ounce.

Airline stocks are also turning in a strong performance in mid-day trading, resulting in a 2.5 percent gain by the NYSE Arca Airline Index. United Continental (UAL) has led the sector higher after raising its third quarter profit margin forecast.

Steel, trucking, and biotechnology stocks are also seeing some strength on the day, while weakness is visible among computer hardware, energy, and brokerage stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Friday. Japan's Nikkei 225 Index surged up by 1.6 percent, while China's Shanghai Composite Index jumped by 1.3 percent.

The major European markets also moved to the upside on the day. While the German DAX Index advanced by 1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index climbed by 0.7 percent and 0.5 percent, respectively.

In the bond market, treasuries have shown a lack of direction over the course of the trading session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.106 percent.