Stocks Continue To Post Substantial Gains In Mid-Day Trading - U.S. Commentary

(RTTNews) - With traders reacting to several positive catalysts, stocks have moved sharply higher during trading on Thursday. The gains on the day have offset the losses posted in the two previous sessions, with the Dow and the S&P 500 reaching new two-month highs.

Currently, the major averages are posting strong gains, near their highs for the session. The Dow is up 264.00 points or 1.5 percent at 17,432.61, the Nasdaq is up 72.26 points or 1.5 percent at 4,912.38 and the S&P 500 is up 29.34 points or 1.5 percent at 2,048.28.

The rally on Wall Street is partly in reaction to comments from European Central Bank President Mario Draghi signaling that the bank will consider providing further stimulus.

In remarks after the ECB kept interest rates unchanged, Draghi said officials discussed lowering the deposit rate, which is already negative.

Traders have also reacted positively to some upbeat U.S. economic news, including a report from the National Association of Realtors showing a much bigger than expected rebound in existing home sales in September.

NAR said existing home sales jumped 4.7 percent to an annual rate of 5.55 million in September from a slightly downwardly revised 5.30 million in August.

Economists had expected existing home sales to climb to a rate of 5.35 million from the 5.31 million originally reported for the previous month.

A separate report from the Labor Department showed that initial jobless claims rose by less than expected in the week ended October 17th.

On the earnings front, shares of McDonald's (MCD) have moved sharply higher after the fast good giant reported better than expected third quarter earnings and revenues as well as an increase in global comparable sales.

Fellow Dow components Caterpillar (CAT) and 3M (MMM) have also moved to the upside after reporting their quarterly results.

Meanwhile, shares of American Express (AXP) have come under pressure after the credit card giant reported third quarter earnings that came in below analyst estimates.

Sector News

Steel stocks are seeing substantial strength in mid-day trading, resulting in a 3.3 percent gain by the NYSE Arca Steel Index. The index is regaining ground after closing lower in the four previous sessions.

Carpenter Technology (CRS) is turning in one of the steel sector's best performances despite reporting weaker than expected first quarter results.

Notable strength is also visible among railroad stocks, as reflected by the 3.2 percent jump by the Dow Jones Railroads Index. Union Pacific (UNP) and Norfolk Southern (NSC) are posting standout gains.

Semiconductor stocks also continue to see considerable strength, driving the Philadelphia Semiconductor Index up by 2.9 percent. With the gain, the index has reached a three-month high.

Most of the other major sectors have also moved to the upside on the day, with significant strength visible among electronic storage, software, and gold stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index slid by 0.6 percent, while China's Shanghai Composite Index jumped by 1.5 percent.

Meanwhile, the major European markets all moved to the upside. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the French CAC 40 Index and the German DAX Index surged up by 2.3 percent and 2.5 percent, respectively.

In the bond market, treasuries have moved modestly lower on the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.1 basis points at 2.041 percent.