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Early Strength On Wall Street Lifts Dow To New Record High - U.S. Commentary

Early Strength On Wall Street Lifts Dow To New Record High - U.S. Commentary
3/5/2013 9:56 AM ET

Stocks have moved mostly higher in early trading on Tuesday, extending the upward move seen over the course of the previous session. The major averages have all moved to the upside, with the Dow reaching a new record intraday high.

While the Nasdaq and the S&P 500 have pulled back off their highs for the young session, the Dow is seeing further upside. The Dow is up 98.19 points or 0.7 percent at 14,226.01, the Nasdaq is up 27.08 points or 0.9 percent at 3,209.11 and the S&P 500 is up 11.05 points or 0.7 percent at 1,536.25.

The early strength on Wall Street is partly due to a positive reaction to recent news from overseas that has helped offset concerns about the outlook for the global economy.

Chinese stocks showed a substantial upward move after outgoing Premier Wen Jiabao promised increased fiscal spending in 2013 in a bid to deliver economic growth of 7.5 percent for the year.

A relatively upbeat report on European service sector activity has also generated some positive sentiment, with the index of activity in the sector coming in above estimates.

The report from Markit showed that its service sector activity index came in at 47.9 in February compared to the flash estimate of 47.3, although a reading below 50 indicates a continued contraction.

Shortly, the Institute for Supply Management is scheduled to release its report on U.S. service sector activity in the month of February.

The index of activity in the service sector is expected to edge down to 55.0 in February from 55.2 in January. A reading above 50 would indicate continued growth.

Traders are keeping an eye on developments in Washington, as House Republicans have unveiled a stopgap measure to fund the federal government through the rest of the fiscal year.

Semiconductor stocks have shown a strong move to the upside in early trading, driving the Philadelphia Semiconductor Index up by 1.4 percent. Cree (CREE) is helping to lead the sector higher after raising its third quarter earnings and revenue guidance.

Steel, gold, and housing stocks are also seeing notable strength, moving higher along with most of the major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index crept up by 0.3 percent and 0.1 percent, respectively, while China's Shanghai Composite Index jumped by 2.3 percent.

The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index is up by 1.2 percent, the French CAC 40 Index is up by 1.6 percent and the German DAX Index is up by 2 percent.

In the bond market, treasuries are seeing modest weakness, extending the downward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.7 basis points at 1.894 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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