Stocks are showing notable strength in mid-morning trading on Monday, with the major averages all showing strong upward moves. Better than expected economic data has helped to push stocks firmly into positive territory over the course of the morning.
The strength in the markets comes after a report from the National Association of Realtors showed an unexpected increase in existing home sales in the month of December, with some buyers taking advantage of lower home prices.
The report showed that existing home sales jumped 6.5 percent to an annual rate of 4.74 million units in December from a downwardly revised pace of 4.45 million units in November..
Economists had had been expecting existing home sales to edge down to a 4.40 million unit rate from the 4.49 million unit rate originally reported for the previous month.
Noting that home prices continue to fall significantly, Lawrence Yun, NAR chief economist, said, "It appears some buyers are taking advantage of much lower home prices."
Separately, the Conference Board released its report on leading economic indicators in the month of December, showing that its leading indicators index unexpectedly increased compared to the previous month.
The report showed that the leading indicators index rose 0.3 percent in December following a 0.4 percent decrease in November. The increase came as a surprise to economists, who had expected the index to show a 0.3 percent decrease.
Earlier in the session, some positive sentiment was generated by news that Pfizer (PFE) has agreed to acquire rival Wyeth (WYE) for $68 billion. The combined company will have seventeen products that each has more than $1 billion in annual sales.
Beyond the implications for the drug industry, the $22.5 billion in financing put up by banks for the combination is a reassuring sign for Wall Street.
In other news, Caterpillar (CAT) released its fourth quarter results before the start of trading, showing that the construction equipment maker's earnings for the quarter fell by much more than expected.
Looking ahead, Caterpillar also forecast full year 2009 earnings well below analyst estimates and said that it has taken actions to cut about 20,000 jobs, including Caterpillar employees, contract and agency workers. The major averages rose to new highs for the session in recent trading, although they have given back some ground in the past few minutes. The Dow is currently up 137.87 at 8,215.43, the Nasdaq is up 34.62 at 1,511.91 and the S&P 500 is up 18.54 at 850.49.
Sector News
Benefiting from an increase by the price of oil, which is up 41.2 at $47.69 a barrel, oil service stocks are turning in some of the best performances of the day. The strength in the sector is reflected by the 5.4 percent gain being shown by the Philadelphia Oil Service Index.
Within the sector, one of the strongest gains is being shown by Noble Corp. (NE), which is up 9.2 percent on the day, trading at its highest intraday level in over two months.
Gold Stocks are also posting notable gains, as the price of the precious metal rises $15 to $912.70 an ounce The Amex Gold Bugs Index is posting a gain of 3.6 percent on the day.
Health insurance stocks are also on the rise, driving the Morgan Stanley Healthcare Payor Index up 3.6 percent. The notable advance by the index is being led by a 15 percent gain by WellCare Health Plans (WCG) and a 7.4 percent gain by Coventry Health Care (CVH).
The gain by Coventry comes after the stock was upgraded to Outperform from Market Perform by Wachovia.
A variety of other sectors have also shown strong upward moves, reflecting broad based strength in the markets. Housing, steel, and natural gas stocks are posting notable gains.
Stocks Driven By Analyst Comments
Lennar (LEN) is posting a considerable gain of 17.5 percent after getting upgraded to Buy from Hold at Citigroup. With the advance, the stock has moved further off of the more than one and a half month closing low it set last Thursday.
The upgrade came as analysts believe that the recent fraud claims against Lennar are "unfounded." Earlier this month Fraud Discovery Institute Inc. chief Barry Minkow issued a report citing flags for fraud at Lennar, sending Lennar's stock price tumbling by 20 percent.
Notable strength is also being shown by Leap Wireless (LEAP), which is up 5.3 percent following an upgrade to Outperform from Neutral at Robert W. Baird.
Other Markets
In overseas trading, most of the markets in the Asia-Pacific region were closed on Monday due to the Lunar New Year holiday. The Japanese market remained open, however, with the benchmark Nikkei 225 Index ending the session down 0.8 percent.
Meanwhile, the major European markets are showing considerable strength. The U.K.'s FTSE 100 Index is currently up 4.2 percent, while the French CAC 40 Index and the German DAX Index are up 4.1 percent and 4.3 percent, respectively.
In the bond market, treasuries are holding just off their lows of the day. Subsequently, the yield on the benchmark ten-year note is up 3.5 basis points at 2.657 percent.
For comments and feedback contact: editorial@rttnews.com
December 12, 2025 15:14 ET Central bank decisions dominated the economic news flow this week led by the Federal Reserve. Trade data from the U.S. also gained attention. The Canadian and Swiss central banks also announced their interest rate decisions. Inflation data from China was in focus as the country released the latest consumer price and producer price data.