Stocks Seeing Further Upside After Yesterday's Rally - U.S. Commentary

(RTTNews) - After moving sharply higher over the course of the previous session, stocks are seeing some further upside in early trading on Wednesday. The major averages have all climbed into positive territory, with the Nasdaq reaching its best levels since 2000.

The major averages have pulled back off their highs in the past few minutes but remain firmly positive. The Dow is up 80.56 points or 0.5 percent at 16,454.42, the Nasdaq is up 25.79 points or 0.6 percent at 4,208.80 and the S&P 500 is up 8.24 points or 0.5 percent at 1,847.12.

The early strength on Wall Street is partly due to upbeat earnings news from financial giant Bank of America (BAC), which reported substantial fourth quarter earnings growth.

Bank of America reported fourth quarter net income applicable to shareholders of $3.18 billion or $0.29 per share, up from $367 million or $0.03 per share in the year-ago period. Analysts had expected the company to report earnings of $0.26 per share.

Buying interest has also been generated by news that the World Bank raised its global growth forecast based on the improvement seen in advanced economies.

The World Bank now expects the global economy to grow by 3.2 percent in 2014, stronger than the 3 percent growth it forecast in June. Economic growth is expected to pick up to 3.4 percent in 2015 and to 3.5 percent in 2016.

On the U.S. economic front, the Labor Department released a report before the start of trading showing that producer prices rose in line with economist estimates in the month of December.

The Labor Department said its producer price index rose by 0.4 percent in December after edging down by 0.1 percent in November. The increase came as higher prices for energy and tobacco products offset a drop in food prices.

Excluding food and energy prices, the core producer price index increased by 0.3 percent in December after inching up by 0.1 percent in the previous month. Economists had expected core prices to tick up by another 0.1 percent.

A separate report from the New York Federal Reserve showed that business activity for New York manufacturers expanded at a much faster pace in the month of January.

The New York Fed said its general business conditions index jumped to 12.5 in January from 2.2 in December, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to climb to 3.5.

Paul Dales, Senior U.S. Economist at Capital Economics, said, "December's U.S. producer prices data and January's Empire State index suggest that both industrial price pressures and activity have strengthened, albeit from low levels."

After helping to lead the markets higher on Tuesday, electronic storage stocks are turning in another strong performance. The NYSE Arca Disk Drive Index has surged up by 3.7 percent to a five-month intraday high.

Banking, networking, and software stocks are also seeing early strength, while most of the other major sectors are showing more modest moves.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index jumped by 2.5 percent following Tuesday's sell-off, while Hong Kong's Hang Seng Index advanced by 0.5 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has surged up by 1.7 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are up by 0.9 percent and 0.6 percent, respectively.

In the bond market, treasuries have come under pressure, pulling back further off Monday's highs. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.3 basis points at 2.902 percent.