Stocks have moved mostly higher in early trading on Monday, adding to the strong gains that were posted last Friday. The major averages have shown a notable move to the upside, with the Dow and the S&P 500 reaching three-month intraday highs.
The major averages have pulled back off their highs for the young session in the past few minutes but remain firmly positive. The Dow is up 68.72 points or 0.5 percent at 13,164.89, the Nasdaq is up 17.50 points or 0.6 percent at 2,985.40 and the S&P 500 is up 6.99 points or 0.5 percent at 1,397.98.
The early strength on Wall Street comes as traders continue to react positively to last week's monthly jobs report, which showed much stronger than expected job growth in the month of July.
The Labor Department said the U.S. economy added 163,000 jobs in July compared to expectations for an increase of 100,000 jobs. Despite the stronger than expected job growth for the month, the unemployment rate unexpectedly edged up to 8.3 percent in July from 8.2 percent in June.
Nonetheless, buying interest is somewhat subdued amid a lack of major U.S. economic data. A relatively light day on the earnings front is also keeping some traders on the sidelines.
Comments from Italian Prime Minister Mario Monti have also limited the upside for the markets, as he warned that Europe is facing the threat of a psychological disintegration and urged all leaders to become more independent from their parliaments.
In an interview with German magazine Der Spiegel, which was published on Sunday, Monti said the debt crisis risks the future of the single-currency bloc.
Reflecting optimism about the outlook for demand, steel stocks have shown a strong upward move in early trading. The NYSE Arca Steel Index has advanced by 2 percent, reaching its best intraday level in almost a month.
Networking stocks have also moved sharply higher, driving the NYSE Arca Networking Index up by 1.7 percent. Arris Group (ARRS: Quote), Ciena (CIEN: Quote) and Polycom (PLCM: Quote) are turning in some of the sector's best performances.
Considerable strength has also emerged among gold stocks, as reflected by the 2.1 percent gain being posted by the NYSE Arca Gold Bugs Index. Airline, tobacco, and oil service stocks are also seeing early strength.
Among individual stocks, shares of Best Buy (BBY: Quote) have moved sharply higher in pre-market trading on news the consumer electronic retailer's founder and chairman Richard Schulze offered to acquire the company for $24 to $26 per share in cash.
Schulze's offer price represents a premium of 36 percent to 47 percent to Best Buy's closing price of $17.64 on Friday. Best Buy is currently up by 19.1 percent on the news.
On the other hand, Knight Capital Group (KCG: Quote) has come under pressure in early trading after the financial services company said it has entered into an agreement for the sale of $400 million of 2 percent convertible preferred stock in an effort to survive the huge trading loss it incurred on erroneous trades.
In overseas trading, stock markets across the Asia-Pacific region saw significant strength during trading on Monday. Japan's Nikkei 225 Index surged up by 2 percent, while Hong Kong's Hang Seng Index jumped by 1.7 percent.
The major European markets have also moved to the upside on the day. The U.K.'s FTSE 100 Index has risen by 0.5 percent, the German DAX Index has advanced by 0.7 percent and the French CAC 40 Index has spiked up by 1.1 percent.
In the bond market, treasuries are regaining some ground after falling sharply last Friday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.6 basis points at 1.551 percent.
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by RTT Staff Writer
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