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

(RTTNews) - After moving notably higher earlier in the session, stocks continue to turn in a strong performance in mid-day trading on Wednesday. With the strength on the day, the major averages are moving higher for the third consecutive session.

The major averages have moved roughly sideways in recent trading, hovering firmly in positive territory. The Dow is up 136.76 points or 0.8 percent at 17,554.03, the Nasdaq is up 34.99 points or 0.7 percent at 5,036.10 and the S&P 500 is up 18.80 points or 0.9 percent at 2,057.77.

The strength on Wall Street partly reflects recent upward momentum, with the major averages further offsetting the sharp pullback seen late last week.

Stocks may also be benefiting from traders doing some window dressing as the year winds down as well as strength in the overseas markets.

Buying interest has also been generated by a sharp increase by the price of crude oil, which has contributed to significant strength among energy stocks.

Crude for February delivery is jumping $1.36 to $37.50 a barrel due partly to a report unexpectedly showing a sharp drop in crude oil inventories.

In U.S. economic news, the Commerce Department released a report showing that new home sales increased for the second consecutive month in November.

The Commerce Department said new home sales climbed 4.3 percent to an annual rate of 490,000 in November from the revised October rate of 470,000.

A separate report from the University of Michigan showed that consumer sentiment improved by more than initially estimated in December.

The report said the final reading on the consumer sentiment index for December came in at 92.6 compared to the preliminary reading of 91.8 and the final November reading of 91.3.

Before the start of trading, the Commerce Department released a report showing that personal income and spending rose at the same rate in the month of November.

The report said personal income increased by 0.3 percent in November after climbing by 0.4 percent in October. Economists had expected income to edge up by 0.2 percent.

The Commerce Department said personal spending also rose by 0.3 percent in November, while revised data showed sending was unchanged in October. The increase in spending matched economist estimates.

The spending component of the report was inadvertently released last night, well ahead of the scheduled release this morning.

A separate report from the Commerce Department showed that durable goods orders were virtually unchanged in November after surging up by 2.9 percent in October. Orders had been expected to pull back by about 0.5 percent.

Sector News

Energy stocks are seeing substantial strength in mid-day trading, benefiting from the sharp increase by the price of crude oil.

Reflecting the strength in the energy sector, the NYSE Arca Natural Gas Index has surged up by 5.8 percent, while the Philadelphia Oil Service Index and the NYSE Arca Oil & Gas Index are up 3.7 percent and 3.1 percent, respectively.

Significant strength is also visible among steel stocks, which are adding to the strong gains posted in the previous session. The NYSE Arca Steel Index has jumped by 4.1 percent, climbing further off the record closing low set last Friday.

Computer hardware stocks are also turning in a particularly strong performance on the day, resulting in a 2.1 percent gain by the NYSE Arca Computer Hardware Index. Seagate (STX) and Supermicro (SMCI) are posting standout gains.

Gold, tobacco, railroad, and chemical stocks have also moved notably higher on the day, reflecting broad based buying interest on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, although the Japanese markets were closed on the day. Hong Kong's Hang Seng Index surged up by 1 percent, while Australia's All Ordinaries Index rose by 0.5 percent.

The major European markets showed substantial moves to the upside on the day. While the U.K.'s FTSE 100 Index soared by 2.6 percent, the French CAC 40 Index and the German DAX Index both jumped by 2.3 percent.

In the bond market, treasuries have moved to the downside, extending the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.9 basis points at 2.268 percent.