Stocks Holding On To Early Gains In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving notably higher early in the session, stocks have continued to perform well throughout the trading day on Friday. The gains on the day have partly offset the sell-off that was seen in the previous session.

Currently, the major averages are hovering firmly in positive territory. The Dow is up 116.24 points or 0.7 percent at 17,956.76, the Nasdaq is up 28.11 points or 0.6 percent at 4,970.06 and the S&P 500 is up 12.22 points or 0.6 percent at 2,097.80.

The early strength on Wall Street was partly due to bargain hunting following the notable pullback seen over the past week.

The losses seen over the past few sessions have pulled the Nasdaq and the S&P 500 down well off the record closing highs set last Friday.

The markets managed to maintain a positive bias following the release of a slew of U.S. economic data not long after the start of trading.

The Institute for Supply Management released a report showing that activity in the manufacturing sector continued to expand in April, although the index of activity in the sector unexpectedly held steady.

The ISM said its purchasing managers index came in at 51.5 in April, unchanged from the reading reported for the previous month.

A reading above 50 indicates continued growth in the manufacturing sector, but economists had expected the index to edge up to 52.0.

While the index was unchanged, Bradley Holcomb, chair of the ISM Manufacturing Business Survey Committee, said 15 of the 18 manufacturing industries reported growth in April compared to only 10 in March, indicating a broader distribution of growth.

The Commerce Department released a separate report showing an unexpected drop on construction spending in the month of March.

The report said construction spending fell by 0.6 percent to annual rate of $966.6 billion in March from the revised February estimate of $972.9 billion.

Meanwhile, the University of Michigan said its consumer sentiment index for April came in at 95.9, unrevised from the mid-month reading and up from 93.0 in March.

Sector News

Airline stocks have shown a substantial move back to the upside on the day after pulling back sharply over the past few sessions. Reflecting the strength in the sector, the NYSE Arca Airline Index has surged up by 2.7 percent.

SkyWest (SKYW) is posting a standout gain within the airline sector after reporting better than expected first quarter earnings after the close of trading on Thursday.

Considerable strength has also emerged among semiconductor stocks, as reflected by the 2.2 percent gain being posted by the NYSE Arca Semiconductor Index. The gain by the index comes after it ended the previous session at its lowest closing level in a month.

Bargain hunting is also contributed to strength in the biotech sector, with the NYSE Arca Biotechnology Index jumping by 1.7 percent after falling to a two-month closing low on Thursday.

Nektar Therapeutics (NKTR) has helped to lead the biotech sector higher, soaring by 13.5 percent after reporting better than expected first quarter results.

Chemical, commercial real estate, and steel stocks are also seeing notable strength in mid-day trading, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, many of the stock markets across the Asia-Pacific region were closed on Friday due to the May Day holiday. Nonetheless, Japan's Nikkei 225 Index inched up by 0.1 percent and Australia's All Ordinaries Index rose by 0.4 percent.

Most of the major European markets were also closed on the day, although the U.K.'s FTSE 100 Index rose by 0.4 percent.

In the bond market, treasuries are extending the downtrend seen over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.1 basis points at 2.117 percent.