Stocks are trying to retain the bulk of their earlier gains in mid-afternoon trading on Monday after steadily ceding ground for the past few hours. The major averages are all in positive territory, poised for a strong start to the holiday-shortened week.
Equities saw initial upside amid weakness in the U.S. dollar, which came following comments from St. Louis Fed President James Bullard, who indicated that the government may extend its mortgage backed security purchase plan past its expiration date in March.
Buying interest was also supported by news from the National Association of Realtors, which reported that existing home sales rose by more than anticipated in the month of October.
The strong existing home sales growth was partly due to the first-time homebuyer tax credit, helping to drive the annual rate to its highest level since February of 2007.
On the corporate front, the rivalry to acquire U.K.-based confectionery maker Cadbury (CBY) is escalating, with Kraft Foods (KFT) reportedly considering an increase in its bid to $16.3 billion. U.S. chocolate maker Hershey (HSY) and Swiss chocolate giant Nestle have also shown interest in Cadbury.
In other news, Chicago Federal Reserve President Charles Evans said that U.S. unemployment would likely peak around 10.5 percent in spring 2010 and probably won't begin to decline until the summer. Evans also said in an interview with the Financial Times that the Fed would probably keep interest rates near zero until late next year, at the earliest.
The major averages are currently hovering firmly in positive territory, although they have moved well off their best levels of the day. The Dow is currently up 119.48 at 10,437.64, the Nasdaq is up 25.61 at 2,171.65 and the S&P 500 is up 13.26 at 1,104.64.
Dow Components
Almost all of the Dow components remain in positive territory, helping the blue chip index to hold onto a triple digit gain in mid-afternoon trading.
Verizon (VZ) is one of the leading gainers in the Dow, advancing by 2.8 percent. The climb has the stock on pace to end the session at its best closing price in two and a half months.
AT&T (T) and Exxon Mobil (XOM) are also on the rise, posting gains of 2.2 percent and 1.6 percent, respectively. AT&T is looking to close at its highest level in nearly seven weeks, while Exxon is poised to set a nine and a half month closing high.
Chevron (CVX), General Electric (GE), Boeing (BA) and Hewlett Packard (HPQ) are also seeing notable gains, among others, although they largely remain rangebound.
On the downside, Merck (MRK) and Alcoa (AA) are the only two Dow components in the red, posting modest losses.
Sector News
Airline stocks are advancing by considerable margins in mid-afternoon trading, with the NYSE Arca Airline Index up by 1.9 percent. While the index remains in a range, component Gol Linhas (GOL) has shot up by 3.9 percent and is poised to set at a sixteen-month closing high.
Further, health insurance stocks continue to see some of the day's more outstanding performances, with the Morgan Stanley Healthcare Provider Index up by 3.5 percent. With the advance, the index reached its best intraday level in nearly fourteen months earlier in the session.
WellPoint (WLP) and Cigna (CI) are leading the sector higher after JP Morgan Chase upgraded both stocks to Overweight from Neutral.
Gold stocks are also posting strong gains, reflecting strength in the resource sector. The NYSE Arca Gold Bugs Index is up by 1.5 percent after reaching its best intraday level in roughly twenty months. The strength in the sector comes as the price of gold closed at another record high.
Banking, defense, commercial real estate and computer technology stocks are also on the rise among others, reflecting strength in a variety of equity segments.
In Focus: Existing Home Sales
As mentioned above, the National Association of Realtors reported that existing home sales jumped 10.1 percent to an annual rate of 6.10 million units in October from a downwardly revised 5.54 million in September. Economists had expected sales to rise to 5.70 million from the 5.57 million originally reported for the previous month.
Lawrence Yun, NAR chief economist, said, "Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November."
"With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer," Yun added.
While the first-time homebuyer tax credit had been due to expire at the end of November, President Barack Obama signed a bill earlier this month that extended and expanded the tax credit.
The bill extends the $8,000 first-time homebuyer tax credit through April 30, 2010 and expands it to include a $6,500 credit for people who have lived in their current homes for at least five years.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Monday, although the Japanese market was closed on the day. Hong Kong's Hang Seng Index rose by 1.4 percent, while China's Shanghai Composite Index closed up 0.9 percent.
The major European markets also saw notable gains, with the U.K.'s FTSE 100 Index rising by 1.7 percent, while the French CAC 40 Index and the German DAX Index closed up by 2.3 percent and 2.4 percent, respectively.
In the bond markets, treasuries are seeing continued weakness despite solid results for today's two-year note auction. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 3.382 percent, posting gain of 2.6 basis points.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.