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

(RTTNews) - Stocks remain mostly positive in mid-day trading on Tuesday after showing a notable move to the upside earlier in the session. The gains on the day are extending a recent upward move by the markets, with the S&P 500 reaching a new record intraday high.

The major averages have pulled back off their best levels but currently remain firmly in positive territory. The Dow is up 59.66 points or 0.4 percent at 16,665.93, the Nasdaq is up 34.55 points or 0.8 percent at 4,220.36 and the S&P 500 is up 8.54 points or 0.5 percent at 1,909.07.

The strength on Wall Street is partly due to the release of a report from the Commerce Department showing an unexpected increase in durable goods orders in the month of April.

Before the start of trading, the Commerce Department said durable goods orders increased by 0.8 percent in April after surging up by an upwardly revised 3.6 percent in March.

The continued growth came as a surprise to economists, who had expected orders to drop by 0.7 percent compared to the 2.9 jump that had been reported for the previous month.

Excluding an increase in orders for transportation equipment, durable goods orders edged up by a more modest 0.1 percent in April.

Positive sentiment was also generated by a separate report from the Conference Board showing that consumer confidence improved in line with economist estimates in the month of May.

The Conference Board said its consumer confidence index climbed to 83.0 in May from a downwardly revised 81.7 in April.

Economists had been expecting the index to edge up to 83.0 from the 82.3 originally reported for the previous month.

Additionally, a separate report from Standard & Poor's showed that home prices in major metropolitan areas rose more than expected in March.

Among individual stocks, shares of Hillshire Brands (HSH) have moved sharply higher on the day after Pilgrim's Pride (PPC) offered to acquire the meat producer for approximately $6.4 billion. The offer values Hillshire at about $45 per share.

Sector News

Banking stocks continue to see considerable strength in mid-day trading, with the Dow Jones Banks Index up by 1.4 percent. The index reached its best intraday level in a month earlier in the session but has given back some ground since then.

Within the banking sector, Bank of America (BAC) is turning in one of the best performances, surging up by 3.6 percent after resubmitting its capital plan to the Federal Reserve.

Significant strength also remains visible among biotechnology stocks, as reflected by the 1.4 percent gain being posted by the NYSE Arca Biotechnology Index. Earlier in the session, the index reached its best intraday level in almost two months.

Networking, internet, and electronic storage stocks are also posting strong gains on the day, contributing to the notable upward move by the tech-heavy Nasdaq.

On the other hand, gold stocks are seeing substantial weakness, moving lower along with the price of the precious metal. With gold for June delivery falling $23.80 to $1,267.90 an ounce, the NYSE Arca Gold Bugs Index is down by 3.6 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index crept up 0.2 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.

Meanwhile, the major European markets all moved on the upside on the day. While the French CAC 40 Index ticked up by 0.1 percent, the U.K.'s FTSE 100 Index and the German DAX Index rose by 0.4 percent and 0.5 percent, respectively.

In the bond market, treasuries have bounced back near the unchanged line after seeing early weakness. 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 2.534 percent.