With traders shrugging off worries about the situation in Cyprus ahead of the Federal Reserve's monetary policy announcement, stocks are mostly higher in mid-day trading on Wednesday after showing a strong move to the upside at the open.
The major averages have pulled back off their best levels of the day but currently remain firmly in positive territory. The Dow is up 55.94 points or 0.4 percent at 14,511.76, the Nasdaq is up 15.01 points or 0.5 percent at 3,244.11 and the S&P 500 is up 8.00 points or 0.5 percent at 1,556.34.
The strength on Wall Street comes as traders shrug off concerns about the situation in Cyprus amid optimism that the Mediterranean island nation will eventually reach an agreement to avoid default even if it means looking to Russia for a new loan instead of the EU.
"Cyprus will either find new (Russian) sources of capital or it will agree to a slightly modified rescue package," Commerzbank economists Jörg Krämer and Christoph Weil said in a research note. "No one can rule out the possibility of negotiations failing again though."
Traders are also looking ahead to the Federal Reserve's announcement of its latest monetary policy decision at about 2 pm ET. The announcement will be followed by a press conference by Fed Chairman Ben Bernanke.
While the Fed is widely expected to maintain its existing policy, traders will be looking for any indications of when the central bank intends to start winding down its quantitative easing program.
Among individual stocks, shares of Adobe Systems (ADBE) have moved notably higher after the software developer reported first quarter results that exceeded analyst estimates. Adobe is currently up by 3.7 percent after reaching a four-year high.
BlackBerry (BBRY) is also turning in a strong performance after Morgan Stanley raised its rating on the smartphone maker to Overweight from Underweight.
On the other hand, delivery giant FedEx (FDX) has come under pressure after reporting weaker than expected third quarter earnings and providing disappointing fourth quarter guidance. Shares of FedEx have fallen by 5.9 percent to a nearly two-month low.
Housing stocks continue to see considerable strength in mid-day trading, resulting in a 1.8 percent gain by the Philadelphia Housing Sector Index. The gain extends a recent upward trend by the index, which has risen to its best intraday level in well over five years.
Lennar (LEN) is turning in one of the housing sector's best performances, with the homebuilder up by 4 percent after reporting better than expected first quarter earnings.
Significant strength has also emerged among airline stocks, which are also extending a recent move to the upside. The NYSE Arca Airline Index has advanced by 1.4 percent to a new six-year intraday high.
Brokerage, internet, and pharmaceutical stocks are also posting notable gains on the day, while most of the other major sectors have shown more modest moves to the upside.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Wednesday, with the Japanese market closed for a public holiday. Hong Kong's Hang Seng Index advanced by 1 percent, while Australia's All Ordinaries Index fell by 0.4 percent.
The major European markets have also turned mixed over the course of the trading day. While the U.K.'s FTSE 100 Index has edged down by 0.3 percent, the German DAX Index is up by 0.5 percent and the French CAC 40 Index is up by 1.1 percent.
In the bond market, treasuries have climbed off their worst levels of the day but continue to see modest weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.1 basis points at 1.929 percent.
by RTT Staff Writer
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