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

(RTTNews) - Stocks continue to see modest strength in mid-day trading on Wednesday after ending the previous session mixed. Buying interest has remained relatively subdued, however, limiting the upside for the markets.

In recent trading, the major averages have moved roughly sideways, hovering in positive territory. The Dow is up 53.52 points or 0.3 percent at 17,991.80, the Nasdaq is up 9.98 points or 0.2 percent at 4,971.73 and the S&P 500 is up 4.83 points or 0.2 percent at 2,116.96.

The strength on Wall Street is partly due to a continued increase by the price of crude oil, which has reached its best levels in over ten months.

Crude for July delivery is currently climbing $0.68 to $51.04 a barrel after rising $0.67 to $50.36 a barrel on Tuesday.

The Energy Information Administration released a report this morning showing a bigger than expected decrease in crude oil inventories in the week ended June 3rd.

The report said that crude oil stockpiles fell by 3.2 million barrels compared to economist estimates for a drop of 2.7 million barrels.

Nonetheless, overall trading activity has remained relatively light amid the lack of more significant U.S. economic data on the day.

Traders may be staying on the sidelines ahead of the Federal Reserve's monetary policy announcement scheduled for next Wednesday.

Recent data seems to have eliminated the possibility that the Fed will raise interest rates, but traders are likely to keep a close eye on the central bank's accompanying statement.

Sector News

Gold stocks continue to see significant strength in afternoon trading, with the NYSE Arca Gold Bugs Index up by 4.5 percent. Earlier in the session, the index reached its best intraday level in well over a year.

The strength among gold stocks comes amid a sharp increase by the price of the precious metal, as gold for August delivery is climbing $16.90 to $1,263.90 an ounce.

Considerable strength is also visible among steel stocks, resulting in a 3.8 percent jump by the NYSE Arca Steel Index. With the gain, the index has reached its highest intraday level in a month.

Railroad stocks are also turning in a strong performance on the day, as reflected by the 2.4 percent gain being posted by the Dow Jones Railroads Index.

Most of the other major sectors are showing only modest moves in mid-day trading, contributing to the relatively lackluster performance by the broader markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.

The major European markets also finished the day mixed. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index and the German DAX Index fell by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries are showing a lack of direction ahead of today's ten-year note auction. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.704 percent.