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Major Averages Posting Modest Gains In Mid-Day Trading - U.S. Commentary


After initially showing a lack of direction, stocks are seeing modest strength in mid-day trading on Friday. The major averages have all moved to the upside, although buying interest has remained somewhat subdued.

Currently, the major averages are holding on to slim gains. The Dow is up 49.89 points or 0.2 percent at 26,195.88, the Nasdaq is up 10.70 points or 0.1 percent at 8,024.41 and the S&P 500 is up 3.01 points or 0.1 percent at 2,907.19.

The modest strength on Wall Street partly reflects optimism about trade after reports earlier this week of another round of talks between the U.S. and China.

Traders are also digesting a slew of U.S. economic data, including a report showing retail sales increased by much less than expected in August.

The Commerce Department said retail sales inched up by 0.1 percent in August after climbing by an upwardly revised 0.7 percent in July.

Economists had expected retail sales to rise by 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.

Excluding the decrease in auto sales, retail sales rose by 0.3 percent in August after jumping by an upwardly revised 0.9 percent in July.

Ex-auto sales had been expected to climb by 0.5 percent compared to the 0.6 percent growth originally reported for the previous month.

Meanwhile, a separate report from the University of Michigan showed a much bigger than expected improvement in consumer sentiment in September.

The report said the consumer sentiment index jumped to 100.8 in September from 96.2 in August. Economists had expected the index to inch up to 96.6.

The Federal Reserve also released a report showing industrial production rose by slightly more than expected in the month of August.

The Fed said industrial production climbed by 0.4 percent in August, matching the upwardly revised increase in July.

Economists had expected production to rise by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.

Sector News

Brokerage stocks are seeing considerable strength in mid-day trading, resulting in a 1.4 percent advance by the NYSE Arca Broker/Dealer Index. The index is climbing further off the seven-month closing low set on Wednesday.

Significant strength is also visible among steel stocks, as reflected by the 1.2 percent gain being posted by the NYSE Arca Steel Index.

Transportation stocks are also turning in a strong performance on the day, while most of the other major sectors are showing more modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index surged up by 1.2 percent, while Hong Kong's Hang Seng Index jumped by 1 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index and the German DAX Index climbed by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries have moved lower after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.5 basis points at 2.998 percent.

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