Stocks Seeing Modest Strength Following Yellen's Testimony - U.S. Commentary

(RTTNews) - After initially showing a lack of direction, stocks have moved modestly higher over the course of the trading day on Thursday. Buying interest has remained relatively subdued, however, limiting the upside for the markets.

The major averages are currently posting modest gains but are off their highs for the session. The Dow is up 26.97 points or 0.2 percent at 16,225.38, the Nasdaq is up 11.62 points or 0.3 percent at 4,303.68 and the S&P 500 is up 2.90 points or 0.2 percent at 1,848.06.

The modest strength on Wall Street comes as traders digest Federal Reserve Chair Janet Yellen's testimony before the Senate Banking Committee.

While the tone of Yellen's testimony was little changed from her remarks before the House Financial Services Committee earlier this month, she acknowledged the economic impact of the severe winter weather.

Yellen said it was too soon to know how much the weather has played a role in this winter's economic lull but said the Fed will consider the issue at its March meeting.

On the economic front, the Commerce Department released a report before the start of trading showing a drop in durable goods orders in the month of January.

The report said durable goods orders fell by 1.0 percent in January after tumbling by a revised 5.3 percent in December. Economists had expected orders to drop by about 1.6 percent.

However, excluding a notable decrease in orders for transportation equipment, durable goods orders actually rose by 1.1 percent in January compared to a 1.9 percent drop in December.

The increase in orders excluding transportation came as a surprise to economists, who had expected a modest decrease of about 0.4 percent.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Overall, there is some evidence that the growth rate of equipment investment is strengthening but, as with much of the other activity and employment data, we won't know for sure until the weather improves."

Meanwhile, the Labor Department released a separate report showing that initial jobless claims came in above economist estimates in the week ended February 22nd.

The report said initial jobless claims rose to 348,000, an increase of 14,000 from the previous week's revised figure of 334,000. Economists had been expecting jobless claims to edge down to 335,000 from the 336,000 originally reported for the previous week.

Sector News

Gold stocks have shown a strong move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 1.1 percent. The strength in the gold sector comes amid a modest increase by the price of the precious metal.

Telecom, steel, and computer hardware stocks are also seeing strength in mid-day trading, although buying interest has remained relatively subdued.

On the other hand, modest weakness among oil and utility stocks has helped to limit the upside for the broader markets.

Other Markets

In overseas trading, stock markets in the Asia-Pacific region once again turned in a mixed performance on Thursday. Japan's Nikkei 225 Index dipped by 0.3 percent, while Hong Kong's Hang Seng Index surged up by 1.7 percent.

The major European markets also turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the German DAX Index dropped by 0.8 percent and the French CAC 40 Index closed just below the unchanged line.

In the bond market, treasuries have moved modestly higher, extending a recent upward move. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.5 basis points at 2.648 percent.