Stocks Remain Firmly Positive After Early Upward Move - U.S. Commentary

(RTTNews) - After moving notably higher early in the session, stocks continue to turn in a strong performance in mid-day trading on Friday. The strength on the day comes on the heels of a recent downward trend for the markets.

Currently, the major averages are holding on to strong gains. The Dow is up 111.49 points or 0.6 percent at 17,546.89, the Nasdaq is up 64.88 points or 1.4 percent at 4,777.42 and the S&P 500 is up 15.79 points or 0.8 percent at 2,055.83.

Bargain hunting has contributed to the rebound on Wall Street, as some traders pick up stocks at reduced levels following the recent weakness.

The losses posted in the previous session dragged the Dow and the Nasdaq down to two-month closing lows, while the S&P 500 hits its lowest closing level in well over a month.

Concerns about the outlook for monetary policy and the possibility that the Federal Reserve may raise interest rates next month have recently weighed on the markets.

The minutes of the Fed's April meeting said most participants determined it would likely be appropriate to raise rates in June if incoming data supports such a move.

Economic data is subsequently likely to be in focus in the weeks leading up to the central bank's next monetary policy meeting on June 14th and 15th.

The National Association of Realtors released a report this morning showing that existing home sales rose for the second consecutive month in April.

NAR said existing home sales climbed 1.7 percent to an annual rate of 5.45 million in April after jumping 5.7 percent to an upwardly revised 5.36 million in March. Economists had expected existing home sales to rise by about 1.3 percent.

Reports on new home sales, international trade, and durable goods orders are likely to attract attention next week along with a speech by Fed Chair Janet Yellen.

Sector News

Semiconductor stocks have shown a significant move to the upside on the day, driving the Philadelphia Semiconductor Index up by 3 percent. With the gain, the index has reached its best intraday level in almost a month.

Applied Materials (AMAT) has led the semiconductor sector higher, jumping by 12.7 percent after reporting better than expected second quarter results and providing upbeat guidance.

Considerable strength is also visible among electronic storage stocks, as reflected by the 2.5 percent gain being posted by the NYSE Arca Disk Drive Index. The index continues to recover after hitting a seven-year closing low last Thursday.

Biotechnology stocks are also seeing significant strength in mid-day trading, with the NYSE Arca Biotechnology Index climbing by 2 percent. Vertex (VRTX) and Alkermes (ALKS) are posting standout gains.

Oil service, brokerage, telecom, and trucking stocks have also moved notably higher, while gold stocks are bucking the uptrend amid a continued decrease by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.

European stocks also rebounded strongly after seeing considerable weakness in the previous session. While the French CAC 40 Index jumped by 1.2 percent, the U.K.'s FTSE 100 Index and the German DAX Index both surged up by 1.7 percent.

In the bond market, treasuries have climbed 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 1.844 percent.