Stocks have moved modestly higher in early trading on Tuesday after showing a lack of direction throughout much of the previous week. The major averages have all moved higher, although buying interest remains somewhat subdued.
The major averages have seen some further upside in recent trading, reaching new highs for the session. The Dow is up 53.44 points or 0.4 percent at 14.035.20, the Nasdaq is up 12.52 points or 0.4 percent at 3,204.55 and the S&P 500 is up 6.43 points or 0.4 percent at 1,526.22.
The early strength on Wall Street is partly due to a rally by European stocks, which have moved notably higher on the heels of an upbeat report on economic sentiment in Germany.
The Zew Institute's economic sentiment index for Germany rose 16.7 points to 48.2 in February, marking the third straight month of growth. Economists had expected a reading of 35.
Positive sentiment has also been generated by reports of additional activity on the merger-and-acquisition front, with Office Depot (ODP) and OfficeMax (OMX) both moving sharply higher on reports that the office supplies retailers are engaged in advanced merger talks.
Citing people familiar with the matter, the Wall Street Journal said the deal between Office Depot and OfficeMax is expected to be stock-for-stock, although the paper said precise terms couldn't be learned.
Semiconductor stocks have shown a strong move to the upside in early trading, driving the Philadelphia Semiconductor Index up by 1 percent. The gain extends a recent upward move by the index, which has risen to a ten-month intraday high.
Airline, oil service, and pharmaceutical stocks are also seeing early strength, while health insurance stocks have come under pressure the government's preliminary Medicare Advantage payment rates showed steeper than expected cuts.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. While Japan's Nikkei 225 Index fell by 0.3 percent, Australia's All Ordinaries Index rose by 0.4 percent.
Meanwhile, the major European markets have all shown notable moves to the upside. The U.K.'s FTSE 100 Index has advanced by 0.7 percent, while the German DAX Index and the French CAC 40 Index have jumped by 1.3 percent and 1.5 percent, respectively.
In the bond market, treasuries are seeing modest strength, climbing further off their recent lows. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.998 percent.
by RTT Staff Writer
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