Stocks continue to see considerable strength in mid-day trading on Tuesday, hovering near their best levels of the day. The markets have benefited from optimism about corporate earnings, although buying interest has waned from earlier in the session.
After moving sharply higher at the start of trading, the major averages have been more or less rangebound. The Dow is up 88.47 points or 0.7 percent at 12,481.16, the Nasdaq is up 26.60 points or 1 percent at 2,703.16 and the S&P 500 is up 12.28 points or 1 percent at 1,292.98.
Much of the strength on Wall Street reflects a positive reaction to quarterly results from Alcoa (AA), which reported its fourth quarter results after the close of trading on Monday. The release of results from Alcoa is seen as the unofficial start of the earnings season.
Alcoa reported a fourth quarter adjusted loss of $0.03 per share on revenues that rose to $6 billion. While the loss for the quarter represents Alcoa's first loss in over two years, the company also forecast a 7 percent increase in global aluminum demand in 2012.
The markets have also responded positively to Chinese trade data showing that the country's trade surplus widened to $16.5 billion in December from $14.5 billion in November.
Meanwhile, traders have largely shrugged off the release of a report from the Commerce Department showing a smaller than expected increase in U.S. wholesale inventories in the month of November.
The report showed that wholesale inventories edged up by 0.1 percent in November following a revised 1.2 percent increase in October. Economists had expected inventories to increase by about 0.5 percent compared to the 1.6 percent growth originally reported for the previous month.
Among individual stocks, shares of Emulex (ELX) have moved sharply higher on the day after the data storage and networking equipment maker forecast second quarter earnings and revenues above its previous outlook and also above the consensus estimates.
Cirrus Logic (CRUS) is also turning in a strong performance after forecasting third quarter revenues above analyst estimates and forecasting fourth quarter revenue growth.
Meanwhile, shares of Tiffany (TIF) have come under pressure after the luxury retailer cut its full year earnings guidance due to weak sales during the holiday season.
With traders expressing optimism about the outlook for global demand, steel stocks continue to turn in some of the market's best performances. The NYSE Arca Steel Index has surged up by 3.4 percent, reaching its best intraday level in a month.
Among steel stocks, Ternium (TX) and Gerdau (GGB) are posting notable gains, advancing by 6.7 percent and 5.5 percent, respectively.
Oil service stocks have also moved sharply higher on the day, driving the Philadelphia Oil Service Index up by 2.6 percent. The strength in the sector comes as crude for February delivery is up $1.64 at $102.95 a barrel after reaching a high of $103.41 a barrel.
Significant strength has also emerged among brokerage stocks, as reflected by the 2.7 percent gain being posted by the NYSE Arca Broker/Dealer Index. A strong gain by Goldman Sachs (GS) has helped to lift the index to a two-month intraday high.
Most of the other major sectors have also moved to the upside on the day, with gold, chemical, housing, and networking stocks posting standout gains.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index advanced by 0.7 percent and China's Shanghai Composite Index surged up by 2.7 percent.
The major European markets also showed notable moves to the upside on the day. While the U.K.'s FTSE 100 Index rose by 1.5 percent, the German DAX Index and the French CAC 40 Index surged up by 2.4 percent and 2.7 percent, respectively.
In the bond market, treasuries are seeing modest 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 1.4 basis points at 1.974 percent.
by RTT Staff Writer
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