Stocks Posting Strong Gains In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving notably higher early in the session, stocks have seen some further upside over the course of the trading day on Thursday. With the rally on the day, the major averages have more than offset the modest pullback seen in the previous session.

Currently, the major averages are just off their highs for the session. The Dow is up 181.35 points or 1 percent at 17,962.18, the Nasdaq is up 58.60 points or 1.2 percent at 4,891.92 and the S&P 500 is up 21.19 points or 1 percent at 2,106.64.

The strength on Wall Street comes as the referendum on whether Britain will remain in the European Union is underway in the U.K.

Traders seem optimistic that voters will oppose the so-called Brexit, although the results of the vote will not be known until well after the markets close.

Capital Economics noted that the last few opinion polls appear to have largely convinced the markets that the U.K. will vote to remain in the EU.

"Despite how close most of the polls are, betting markets - which have consistently favored Remain - are increasingly confident that voters will choose to stay in the EU," Capital Economics said in a note.

The firm added, "Movements in financial markets have also reflected betting markets' view that a Brexit is looking increasingly unlikely."

Amid the focus on the Brexit vote, traders have largely shrugged off a batch of U.S. economic data, including a Commerce Department report showing a pullback in new home sales in May.

The report said new home sales fell by 6.0 percent to an annual rate of 551,000 in May from the downwardly revised April rate of 586,000.

While the April rate was downwardly revised, it still represents the highest rate of new home sales since February of 2008.

A separate report from the Labor Department said initial jobless claims fell to a nearly two-month low last week, while the Conference Board reported an unexpected drop by its index of leading economic indicators in May.

Sector News

After falling sharply in the previous session, electronic storage stocks have shown a substantial move back to the upside. The NYSE Arca Disk Drive Index has surged up by 4.2 percent after plunging by 4 percent on Wednesday.

Micron Technology (MU) is leading the storage sector higher, jumping by 8.7 after Nomura upgraded its rating on the company's stock to Buy from Reduce.

Financial stocks are also seeing considerable strength in mid-day trading, with the NYSE Arca Broker/Dealer Index and the Dow Jones Banks Index climbing by 2.4 percent and 2.5 percent, respectively.

Steel, energy, semiconductor and networking stocks have also shown notable upward moves, reflecting broad based buying interest on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Thursday. Japan's Nikkei 225 Index surged up by 1.1 percent, while China's Shanghai Composite Index fell by 0.5 percent.

Meanwhile, the major European markets all showed strong moves to the upside on the day. While the U.K.'s FTSE 100 Index jumped by 1.2 percent, the German DAX Index shot up by 1.9 percent and the French CAC 40 Index soared by 2 percent.

In the bond market, treasuries are seeing notable weakness amid the rally on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.5 basis points at 1.73 percent.