Stocks have shown a strong upward move over the course of the trading day on Monday after turning in a mixed performance last week. The markets have benefited from a positive reaction to remarks by Federal Reserve Chairman Ben Bernanke.
The major averages currently remain firmly positive after moving sharply higher earlier in the session. The Dow is up 123.21 points or 0.9 percent at 13,203.94, the Nasdaq is up 38.09 points or 1.2 percent at 3,106.01 and the S&P 500 is up 13.44 points or 1 percent at 1,410.55.
Much of the strength on Wall Street stems from the latest remarks by Bernanke, who noted that the U.S. unemployment rate has declined faster than the Fed predicted but cautioned that the jobs market remains far from normal.
"We have seen some positive signs on the jobs front recently, including a pickup in monthly payroll gains and a notable decline in the unemployment rate," Bernanke told the National Association for Business Economics Annual Conference in Washington, DC.
While the Fed chief warned that cyclical problems could turn into structural weakness in the U.S. jobs market without a more robust recovery, he assured that the Fed's zero-interest rate policy and other support measures will help reduce unemployment over time by promoting economic growth.
As a result of the focus on Bernanke's remarks, traders have largely shrugged off the release of a report from the National Association of Realtors showing an unexpected drop in pending home sales in the month of February.
NAR said its pending home sales index fell by 0.5 percent to a reading of 96.5 in February after rising by 2.0 percent to a reading of 97.0 in January. The drop surprised economists, who had expected the index to increase by 1.0 percent.
A pending sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
The unexpected decrease by the pending home sales index in February came after it reached its highest level since April of 2010 in January.
Among individual stocks, shares of Lions Gate Entertainment (LGF) are up by 2.7 percent after the company's latest movie "The Hunger Games" topped the box office with $155 million in its opening weekend, a record for a March release.
Healthcare-related stocks are turning in some of the market's best performances as the Supreme Court begins hearing arguments regarding President Obama's landmark healthcare reform law. A ruling on the constitutionality is not expected until June.
Reflecting the strength among health insurance and healthcare provider stocks, the Morgan Stanley Healthcare Payor Index and the Morgan Stanley Healthcare Provider Index are up by 2.4 percent and 2.3 percent, respectively.
Significant strength has also emerged among telecom stocks, as reflected by the 2.1 percent gain being posted by the NYSE Arca Telecom Index. Sprint Nextel (S) and Qualcomm (QCOM) are helping to lead the sector higher.
Gold stocks have also shown a strong move to the upside on the day, moving higher along with the price of the precious metal. With gold for April delivery climbing $23.60 to $1,686 an ounce, the NYSE Arca Gold Bugs Index is up by 1.4 percent.
Networking, software, biotechnology, and defense stocks are also posting strong gains, moving higher along with most of the major sectors.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Japan's Nikkei 225 Index edged up by 0.1 percent, while Australia's All Ordinaries slipped by 0.1 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index rose by 1.2 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index advanced by 0.8 percent and 0.7 percent, respectively.
In the bond market, treasuries have come under pressure after trending higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.5 basis points at 2.282 percent.
by RTT Staff Writer
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