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U.S. Stocks Posting Strong Gains After Early Rally

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Stocks moved sharply higher in early trading on Monday, continuing to recover from the sell-off seen last Wednesday. The major averages have given back some ground since then but remain firmly in positive territory.

Currently, the major averages are posting strong gains. The Dow is up 266.00 points or 1 percent at 26,152.01, the Nasdaq is up 101.59 points or 1.3 percent at 7,997.58 and the S&P 500 is up 33.37 points or 1.2 percent at 2,922.05.

Continued optimism about new global stimulus generated initial buying interest after the People's Bank of China said it would use market-based reform methods to help lower real lending rates and prop up a slowing economy.

News that President Donald Trump's administration is once again delaying restrictions on Chinese tech giant Huawei also contributed to the early strength on Wall Street.

Commerce Secretary Wilbur Ross revealed the news in an appearance on the Fox Business Network, announcing a "temporary general license" set to expire on Monday will be extended for another 90 days.

The move will allow Huawei to continue purchasing supplies from U.S. companies despite being placed on an economic blacklist back in May.

"There is another 90 days for the U.S. telecom companies, some of the rural companies are dependent on wild ways," Ross said. "So we're giving them a little more time to wean themselves off. But there are no specific licenses being granted for anything."

The upward momentum also comes after Trump's economic advisers took to the Sunday talk shows to downplay concerns about a possible recession.

Trump himself told reporters that he does not foresee an economic downturn even after last week's yield curve inversion, which is widely seen as an early recession indicator.

"I don't think we're having a recession," Trump said. "We're doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they're loaded up with money."

Extending the rebound seen last Friday, oil service stocks have shown a substantial move to the upside in morning trading.

Reflecting the continued strength in the sector, the Philadelphia Oil Service Index has surged up by 3.3 percent, climbing further off last Thursday's eighteen-year closing low.

The strength among oil service stocks comes amid an increase by the price of crude oil, with crude for September delivery climbing $0.76 to $55.63 a barrel.

Semiconductor and computer hardware stocks are also seeing significant strength amid the news about the reprieve for Huawei, while natural gas, steel and transportation have also moved notably higher.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index advanced by 0.7 percent, while China's Shanghai Composite Index surged up by 2.1 percent.

The major European markets have also shown strong moves to the upside on the day. While the U.K.'s FTSE 100 Index has jumped by 1.1 percent, the French CAC 40 Index is up by 1.2 percent and the German DAX Index is up by 1.3 percent.

In the bond market, treasuries are extending the modest pullback seen last Friday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.1 basis points at 1.600 percent.

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