Stocks Holding On To Modest Gains In Mid-Day Trading - U.S. Commentary

(RTTNews) - Stocks remain mostly positive in mid-day trading on Wednesday, partly offsetting the weakness seen in the previous session. Buying interest has remained relatively subdued, however, limiting the upside for the markets.

The major averages have recently pulled back off their highs for the session but remain in positive territory. The Dow is up 37.62 points or 0.2 percent at 18,020.69, the Nasdaq is up 19.78 points or 0.4 percent at 4,797.22 and the S&P 500 is up 2.60 points or 0.1 percent at 2,082.95.

The modest strength on Wall Street may partly reflect some window dressing on the final trading day of the year, although traders seem reluctant to make significant moves.

Many traders are likely to remain on the sidelines throughout the day ahead of tonight's New Year's Eve festivities and the New Year's Day holiday on Thursday.

On the economic front, the National Association of Realtors released a report showing a bigger than expected increase in pending home sales in the month of November.

NAR said its pending home sales index rose 0.8 percent to 104.8 in November from a downwardly revised 104.0 in October. Economists had been expecting the index to increase by about 0.5 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Meanwhile, the Labor Department released a separate report before the start of trading showing a bigger than expected rebound in initial jobless claims in the week ended December 27th.

The report said initial jobless claims climbed to 298,000, an increase of 17,000 from the previous week's revised level of 281,000. Economists had expected jobless claims to rise to 290,000.

MNI Indicators also released a report showing that its Chicago business barometer fell to a five-month low in December, indicating a notably slower rate of growth in Chicago-area business activity.

Sector News

Extending a recent upward trend, airline stocks are seeing considerable strength in mid-day trading. The NYSE Arca Airline Index has advanced by 1.3 percent, reaching its best intraday level in over twelve years.

Republic Airways (RJET) has helped to lead the airline sector higher, with the regional airline jumping by 3 percent.

Notable strength also remains visible among biotechnology stocks, as reflected by the 1.2 percent gain being posted by the NYSE Arca Biotechnology Index. Nektar Therapeutics (NKTR) and Pharmacyclics (PCYC) are posting standout gains.

Housing stocks are also turning in a strong performance on the heels of the upbeat pending home sales data, while gold stocks are moving lower along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday, although several markets were closed for the day. Hong Kong's Hang Seng Index rose by 0.4 percent, while Australia's All Ordinaries Index edged down by 0.1 percent.

Meanwhile, the European markets saw some strength in an abbreviated session. The U.K.'s FTSE 100 Index rose by 0.3 percent, while the French CAC 40 advanced by 0.6 percent. The German market was closed on the day.

In the bond market, treasuries are moving modestly higher, extending a recent upward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.1 basis points at 2.179 percent.