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Stocks Moving Modestly Higher, Dow Creeps Above 13,000 - U.S. Commentary

2/24/2012 12:01 PM ET

While buying interest remains subdued, stocks are seeing modest strength in mid-day trading on Friday. The markets have benefited from some relatively upbeat economic data, although traders seem reluctant to make any significant moves.

The major averages are currently posting slim gains, with the Dow just above the key 13,000 level. The Dow is up 17.21 points or 0.1 percent at 13,001.90, the Nasdaq is up 8.75 points or 0.3 percent at 2,965.73 and the S&P 500 is up 4.05 points or 0.3 percent at 1,367.51.

The modest strength on Wall Street comes on the heels of the release of a report from Thomson Reuters and the University of Michigan showing an unexpected improvement in consumer sentiment in the month of February.

The report showed that the consumer sentiment index for February was upwardly revised to 75.3 from the mid-month reading of 72.5. Economists had expected the index to be upwardly revised to 73.0.

With the bigger than expected upward revision, the consumer sentiment index showed a modest increase compared to the January reading of 75.0. The index is now at its highest level since February of 2011.

A separate report from the Commerce Department showed a modest drop in new home sales in the month of January, although sales came in well above estimates due to a revision to the December data.

The Commerce Department said new home sales slipped 0.9 percent to an annual rate of 321,000 in January from the revised December rate of 324,000. Economists had expected new home sales to edge up to 315,000 from the 307,000 originally reported for the previous month.

Among individual stocks, Nordson (NDSN) and Salesforce.com (CRM) are posting strong gains after reporting better than expected quarterly results.

Meanwhile, J.C. Penney (JCP) is trading modestly lower after the department store operator reported a fourth quarter loss compared to a year-ago profit. Excluding restructuring charges, however, the company reported a profit that exceeded analyst estimates.

Sector News

Most of the major sectors continue to show only modest moves in mid-day trading, although significant strength has emerged among steel stocks. Reflecting the strength in the steel sector, the NYSE Arca Steel Index has advanced by 1.6 percent.

Mechel (MTL) and Cliffs Natural Resources (CLF) are turning in two of the steel sector's best performances, climbing by 8.3 percent and 4.1 percent, respectively.

Considerable strength also remains visible among health insurance stocks, as reflected by the 1.4 percent gain being posted by the Morgan Stanley Healthcare Payor Index. WellCare (WCG) has helped to lead the sector higher, surging up by 5.5 percent.

Railroad, defense, and software stocks are also posting notable gains on the day, while gold stocks have moved to the downside along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher over the course of the trading day on Friday. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index edged up by 0.1 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index advanced by 0.6 percent and 0.8 percent, respectively.

In the bond market, treasuries are nearly flat amid the choppy trading on Wall Street. The yield on the benchmark ten-year note is down by less than a basis point at 1.981 percent.

by RTT Staff Writer

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