Stocks Turning In Strong Performance In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving notably higher in early trading on Monday, stocks have continued to turn in a strong performance over the course of the session. The gains on the day are extending last week's upward move, lifting the Dow and the S&P 500 to new record highs.

Currently, the major averages remain firmly positive, near their highs for the session. The Dow is up 78.36 points or 0.5 percent at 16,299.50, the Nasdaq is up 35.83 points or 0.9 percent at 4,140.58 and the S&P 500 is up 9.90 points or 0.5 percent at 1,828.22.

The strength on Wall Street partly reflects continued optimism about the outlook for the U.S. economy following upbeat remarks by the head of the International Monetary Fund.

In an appearance on NBC's "Meet the Press" on Sunday, IMF Managing Director Christine Lagarde said the lender will raise its forecast for U.S. economic growth in 2014 due to recent positive economic data and the recently approved budget deal in Washington.

"Growth is picking up," Lagarde said. "And unemployment is going down. So, all of that gives us a much stronger outlook for 2014."

The IMF previously forecast that the U.S. economy would grow by about 2.6 percent in 2014 compared to its forecast for 1.6 percent growth in 2013.

The Commerce Department also released a report before the start of trading showing that U.S. personal spending increased in line with economist estimates in the month of November.

The report showed that personal spending rose by 0.5 percent in November following a 0.4 percent increase in the previous month.

The continued spending growth came even as personal income crept up by just 0.2 percent in November compared to expectations for an increase of about 0.5 percent.

Amna Asaf, an economists at Capital Economics, said, "November's U.S. personal income and spending data provide more evidence that real consumption growth is on course to grow between 3% and 3.5% annualized in the fourth quarter."

In corporate news, shares of Apple (AAPL) have moved sharply higher after the tech giant reached a multi-year deal with China Mobile to sell the iPhone in China.

Sector News

Electronic storage stocks continue to see considerable strength in mid-day trading, with the NYSE Arca Disk Drive Index up by 3.2 percent. With the gain, the index has risen to a two-month intraday high.

Quantum (QTM), EMC Corp. (EMC), and Hutchinson Technology (HTCH) are turning in some of the storage sector's best performances.

Significant strength is also visible among housing stocks, as reflected by the 2.5 percent gain being posted by the Philadelphia Housing Sector Index. The index has reached its best intraday level in almost seven months.

Biotechnology stocks are also turning in a particularly strong performance on the day, driving the NYSE Arca Biotechnology Index up by 1.9 percent to a record intraday high.

Steel, natural gas, and banking stocks are also seeing notable strength, moving to the upside along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Hong Kong's Hang Seng Index advanced by 0.5 percent, while China's Shanghai Composite Index edged up by 0.2 percent. Meanwhile, the Japanese markets were closed for a public holiday.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index jumped by 1.1 percent, the German DAX Index climbed 0.9 percent and the French CAC 40 Index rose by 0.5 percent.

In the bond market, treasuries are seeing modest weakness but remain off their recent lows. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.7 basis points at 2.914 percent.