Stocks Remain Firmly Positive Following Early Upward Move - U.S. Commentary

(RTTNews) - After moving sharply higher earlier in the session, stocks continue to turn in a strong performance in mid-day trading on Monday. The gains on the day have nearly offset the sell-off that was seen during trading last Friday.

Currently, the major averages are hovering near their best levels of the day. The Dow is up 232.54 points or 1.3 percent at 18,058.84, the Nasdaq is up 56.74 points or 1.2 percent at 4,988.55 and the S&P 500 is up 21.00 points or 1 percent at 2,102.18.

The strength on Wall Street comes amid news of additional Chinese stimulus after reports about new trading regulations in China contributed to the sharp pullback in the previous session.

On Sunday, the People's Bank of China lowered the reserve requirement ratio for banks by 100 basis points to 18.5 percent.

The reduction marked the second cut this year and came after the Chinese economy logged its weakest growth in six years.

Lou Brien, an economic strategist at DRW Trading, said, "The cut in the RRR was larger than many were expecting and it was the biggest since 2008. It is estimated that it will free up the equivalent of $212 billion to be loaned out."

Buying interest has also been generated in reaction to the latest batch of earnings news, with financial giant Morgan Stanley (MS) moving higher after reporting its first quarter results.

Morgan Stanley reported earnings and revenues that exceeded analyst estimates, benefiting from a strong performance in investment management and fixed income.

Toy maker Hasbro (HAL) and oil services provider Halliburton (HAL) have also moved notably higher after reporting quarterly results that beat expectations.

Amid a quiet week on the U.S. economic front, earnings news is likely to move into the spotlight, with a slew of big-name companies due to release their quarterly results.

IBM (IBM), Coca-Cola (KO), McDonald's (MCD), AT&T (T), Facebook (FB), General Motors (GM), Google (GOOG), and Microsoft (MSFT) are among the companies due to report their results this week.

Sector News

Railroad stocks continue to see substantial strength in mid-day trading, with the Dow Jones Railroads Index surging up by 2.6 percent. With the gain, the index is climbing further off the six-month closing low it set last Wednesday.

CSX Corp. (CSX) has helped to lead the railroad sector higher, jumping by 4.8 percent to its best intraday level in almost a month.

Significant strength is also visible among trucking stocks, as reflected by the 2.2 percent gain being posted by the Dow Jones Trucking Index. YRC Worldwide (YRCW) and Quality Distribution (QLTY) are turning in two of the sector's best performances.

Utilities stocks also continue to see considerable strength on the day, resulting in a 1.9 percent jump by the Dow Jones Utilities Average.

Telecom, software, computer hardware, and steel stocks are also moving notably higher, reflecting broad based buying interest on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index edged down by 0.1 percent, while Hong Kong's Hang Seng Index tumbled by 2 percent.

Meanwhile, the major European markets moved notably higher on the day. While the German DAX Index surged up by 1.7 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index advanced by 0.9 percent and 0.8 percent, respectively.

In the bond market, treasuries are giving back some ground after trending higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.9 basis points at 1.879 percent.