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Stocks Remain Mostly Positive After Early Upward Move - U.S. Commentary


After moving to the upside in early trading on Friday, stocks have continued to perform well over the course of the trading day. While buying interest has remained somewhat subdued, the major averages are partly offsetting the losses posted in the two previous sessions.

The major averages have moved roughly sideways in recent trading, hovering firmly in positive territory. The Dow is up 60.73 points or 0.4 percent at 13,941.35, the Nasdaq is up 15.47 points or 0.5 percent at 3,146.96 and the S&P 500 is up 6.71 points or 0.5 percent at 1,509.13.

The strength on Wall Street comes as some traders are buying on the dip seen over the two previous sessions, picking up stocks at somewhat reduced levels.

A positive reaction to quarterly results from Hewlett-Packard (HPQ) has also generated some positive sentiment, with the tech giant up by 9.4 percent after reaching a six-month intraday high.

After the close of trading on Thursday, HP reported fiscal first quarter earnings that fell year-over-year but exceeded analyst estimates. The company also reported better than expected revenues and forecast second quarter earnings above expectations.

The markets have also benefited from a rally by European stocks, which rebounded following the release of a positive German business sentiment reading.

The Ifo Institute said its business climate index rose for the fourth straight month, climbing to 107.4 in February from 104.3 in January. With the increase, the index reached a ten-month high, coming in well above economist estimates for a reading of a 104.9.

A research note from Capital Economics said the rise by Ifo index supports other recent evidence that the German economy has recovered somewhat since contracting in the fourth quarter.

Nonetheless, continued concerns about the near-term outlook have helped limit the upside for the markets, with some analysts suggesting that stocks need to see a bigger correction before seeing further strength.

Sector News

After falling sharply in the two previous sessions, semiconductor stocks have shown a strong move back to the upside on the day. The Philadelphia Semiconductor Index has risen by 1.5 percent but remains well off the ten-month closing high set on Tuesday.

Texas Instruments (TXN) has helped to lead the semiconductor sector higher, with the chip maker up by 4.5 percent after raising its quarterly dividend by 33 percent and boosting its share buyback program by $5 billion.

Considerable strength has also emerged among trucking stocks, as reflected by the 1.4 percent gain being posted by the Dow Jones Trucking Index. The index is regaining some ground after ending the previous session at its lowest closing level in well over a month.

Natural gas, brokerage, and biotechnology stocks are also posting notable gains, while most of the other major sectors have shown more modest moves to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday after ending the previous session sharply lower. Japan's Nikkei 225 Index rose by 0.7 percent, while Australia's All Ordinaries Index advanced by 0.8 percent.

The major European markets also showed notable moves back to the upside. While the French CAC 40 Index surged up by 2.3 percent, the German DAX Index jumped by 1 percent and the U.K.'s FTSE 100 Index climbed by 0.7 percent.

In the bond market, treasuries have moved modestly higher, extending the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.6 basis points at 1.96 percent.

by RTTNews Staff Writer

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