Stocks Seeing Further Upside Following Early Strength - U.S. Commentary

(RTTNews) - After showing an initial upward move, stocks have seen some further upside over the course of the trading session on Wednesday. With the rally on the day, the major averages are adding to the substantial gains posted in the previous session.

Currently, the major averages are just off their highs for the session. The Dow is up 230.31 points or 1.3 percent at 17,640.03, the Nasdaq is up 77.58 points or 1.7 percent at 4,769.45 and the S&P 500 is up 29.64 points or 1.5 percent at 2,065.73.

The strength on Wall Street comes as the global markets continue to recover from the sell-off inspired by the British vote to leave the European Union.

Easing concerns about the impact of the so-called Brexit have led traders to go bargain hunting following the steep losses posted on Friday and Monday.

With regard to the Brexit, European leaders are meeting in Brussels to discuss the way forward after the unexpected vote.

The EU leaders continue to urge Britain to act quickly on the vote while also expressing hope that the U.K. will remain a close partner.

On the U.S. economic front, the Commerce Department released a report this morning showing that personal income rose by slightly less than expected in May.

The report said personal income edged up by 0.2 percent in May after rising by an upwardly revised 0.5 percent in April. Economists had expected income to rise by 0.3 percent.

Meanwhile, the Commerce Department also said personal spending climbed by 0.4 percent in May after spiking by an upwardly revised 1.1 percent in April. The increase matched economist estimates.

A separate report from the National Association of Realtors showed a bigger than expected pullback in pending home sales in the month of May.

NAR said its pending home sales index slid 3.7 percent to 110.8 in May from a downwardly revised 115.0 in April. Economists had expected the index to drop by 1.0 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Sector News

Gold stocks continue to turn in some of the market's best performances in mid-day trading, with the NYSE Arca Gold Bugs Index up by 3.7 percent. With the gain, the index has reached its best intraday level in almost two years.

The strength among gold stocks comes amid an increase by the price of the precious metal, as gold for August delivery is climbing $10.50 to $1,328.40 an ounce.

Significant strength has also emerged among electronic storage stocks, as reflected by the 3.5 percent gain being posted by the NYSE Arca Disk Drive Index. Seagate Technology (STX) and Western Digital (WDC) are posting standout gains.

Energy stocks are also seeing considerable strength on the day amid an increase by the price of crude oil. Crude for August delivery is currently jumping $1.24 to $49.09 a barrel.

Steel, transportation, software and housing stocks have also moved notably higher amid broad based buying interest on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved to the upside during trading on Wednesday. Japan's Nikkei 225 Index spiked by 1.6 percent, while Hong Kong's Hang Seng Index shot up by 1.3 percent.

The major European markets also moved notably higher on the day. While the German DAX Index jumped by 1.8 percent, the French CAC 40 Index surged up by 2.6 percent and the U.K.'s FTSE 100 Index soared by 3.6 percent.

In the bond market, treasuries are turning in another lackluster performance after ending the previous session nearly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.46 percent.