Stocks have moved modestly higher in early trading on Wednesday, adding to the gains posted in the previous session. The major averages have all climbed into positive territory, with the moving further above the 13,000 level.
The major averages have seen some further upside in the past few minutes, reaching new highs for the young session. The Dow is up 29.82 points or 0.2 percent at 13,034.94, the Nasdaq is up 8.11 points or 0.3 percent at 2,994.87 and the S&P 500 is up 3.70 points or 0.3 percent at 1,375.88.
The early strength on Wall Street is partly due to a positive reaction to a report from the Commerce Department showing that the U.S. economy expanded by more than previously estimated in the final three months of 2011.
The report showed that GDP increased at an annual rate of 3.0 percent in the fourth quarter, reflecting an upward revision from the 2.8 percent growth that was initially estimated. The upward revision surprised economists, who had expected GDP growth to be unrevised.
The Commerce Department said that the stronger than previously estimated growth reflected upward revisions to non-residential fixed investment and consumer spending as well as a downward revision to imports, which are a subtraction in the calculation of GDP.
Traders are also digesting the results of the European Central Bank's long term refinancing operation, which essentially extends cheap financing to banks.
The LTRO elicited a resounding response, with about 800 banks placing bids compared with the 523 banks that participated at the December auction. The central bank allotted 529.5 billion euros to the banks through the 3-year refinancing operation, representing a record amount.
After bucking the uptrend seen on Tuesday, housing stocks are seeing notable strength in early trading. The Philadelphia Housing Sector Index is up by 1.2 percent amid strong gains by Meritage Homes (MTH) and Ryland Group (RYL).
Computer hardware, airline, and biotechnology stocks are also seeing early strength, although buying interest seems relatively subdued. Most of the major sectors are showing only modest moves.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Wednesday, although Japan's Nikkei 225 Index closed only just above the unchanged line. Hong Kong's Hang Seng Index and Australia's All Ordinaries Index rose by 0.5 percent and 0.9 percent, respectively.
Meanwhile, the major European markets have turned mixed over the course of the trading day. While the U.K.'s FTSE 100 Index is just below the unchanged line, the German DAX Index and the French CAC 40 Index are up by 0.6 percent and 0.8 percent, respectively.
In the bond market, treasuries are showing a lack of direction after ending the previous session nearly flat. The yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.934 percent.
by RTT Staff Writer
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