After seeing considerable volatility early in the session, stocks are seeing significant strength in mid-day trading on Friday. The markets have benefited from a positive reaction to a closely watched speech by Federal Reserve Chairman Ben Bernanke.
The major averages have pulled back off their best levels of the day but currently remain firmly in positive territory. The Dow is up 127.76 points or 1 percent at 13,128.47, the Nasdaq is up 20.88 points or 0.7 percent at 3,069.59 and the S&P 500 is up 10.71 points or 0.8 percent at 1,410.19.
The strength on Wall Street comes on the heels of Bernanke's highly anticipated speech at the Kansas City Fed's Economic Symposium in Jackson Hole, Wyoming.
Bernanke reiterated that the central bank will act "as needed" to boost the sluggish economy, although he did not explicitly signal any further stimulus efforts.
At the same time, analysts noted that a large portion of Bernanke's speech was devoted to touting the effectiveness of the Fed's "nontraditional policies."
Paul Dales, Senior U.S. Economist at Capital Economics, said the speech came across as a "staunch defense of the effectiveness of unconventional monetary policy" and suggested that Bernanke has "taken a further step along the path to more policy stimulus."
With the focus on Bernanke, traders largely shrugged off a batch of U.S. economic data, including a report from Thomson Reuters and the University of Michigan showing that consumer sentiment improved by more than previously estimated in the month of August.
Among individual stocks, shares of OmniVision Technologies (OVTI) are moving notably higher after the image sensor maker reported better than expected first quarter revenues and raised its second quarter revenue guidance.
Government IT contractor SAIC, Inc. (SAI) has also moved to the upside after reporting second quarter revenues that exceeded analyst estimates. The company also announced plans to separate into two independent, publicly traded companies.
Meanwhile, shares of Zumiez (ZUMZ) have come under pressure after the sports equipment retailer forecast third quarter earnings below analyst estimates.
Gold stocks have moved sharply higher on the day, benefiting from a notable increase by the price of the precious metal. With gold for December delivery surging up $25.50 to $1,682.60 an ounce, the NYSE Arca Gold Bugs Index is up by 2.1 percent.
New Gold (NGD) and Coeur d'Alene Mines (CDE) are turning in two of the gold sector's best performances, advancing by 4 percent and 3.4 percent, respectively.
Significant strength has also emerged among oil service stocks, as reflected by the 1.7 percent gain being posted by the Philadelphia Oil Service Index. The strength in the sector comes as crude oil for October delivery has jumped $1.68 to $96.30 a barrel.
Housing stocks have also shown a strong move to the upside on the day, driving the Philadelphia Housing Sector Index up by 1.3 percent. Semiconductor, defense, and airline stocks are also posting notable gains amid broad based buying interest.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index tumbled by 1.6 percent, while Hong Kong's Hang Seng Index ended the day down by 0.4 percent.
Meanwhile, the major European markets ended the day mixed. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index surged up by 1 percent and 1.1 percent, respectively.
In the bond market, treasuries have turned higher over the course of the trading session after seeing early weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.7 basis points at 1.593 percent.
by RTT Staff Writer
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