Stocks Seeing Modest Strength In Mid-Day Trading - U.S. Commentary

(RTTNews) - Buying interest has remained somewhat subdued, but stocks have moved modestly higher over the course of the trading day on Friday. With the upward move, the markets are extending the rally seen in the previous session.

Currently, the major averages remain in positive territory. The Dow is up 52.91 points or 0.3 percent at 17,194.66, the Nasdaq is up 6.69 points or 0.1 percent at 4,876.79 and the S&P 500 is up 5.20 points or 0.3 percent at 2,029.06.

The choppy trading on Wall Street partly reflects uncertainty about the near-term outlook for the markets on the heels of the volatility seen over the past several weeks.

While stocks sold off sharply in mid-August amid concerns about developing economies and the outlook for U.S. interest rates, the markets have shown a notable recovery since then.

The rally on Thursday lifted the Dow and the S&P 500 to their best closing levels in nearly two months, although they remain well off their highs from earlier in the year.

The markets have benefited from signs that the Federal Reserve will hold off on raising interest rates, although lingering concerns about the global economy have limited the upside.

Traders are also digesting the latest U.S. economic data, with today's reports showing mixed readings on industrial production and consumer sentiment.

The Federal Reserve released a report showing a modest drop in industrial production in September, while the University of Michigan said its consumer sentiment index rebounded more than expected in October.

Among individual stocks, shares of Youku Tudou (YOKU) have moved sharply higher on news Alibaba (BABA) has offered to acquire the portion of the digital entertainment provider it does not already own.

Toy maker Mattel (MAT) is also turning in a strong performance on the day even though the company reported weaker than expected third quarter results.

On the other hand, shares of Quanta Services (PWR) have shown a steep drop after the contracting services provider lowered its third quarter guidance.

Sector News

While many of the major sectors are showing only modest moves on the day, substantial weakness is visible among oil service stocks. Reflecting the weakness in the oil service sector, the Philadelphia Oil Service Index is down by 3.3 percent.

Within the oil service sector, Schlumberger (SLB) is posting a notable loss after reporting weaker than expected third quarter revenues.

Steel stocks have also shown a significant move to the downside, dragging the NYSE Arca Steel Index down by 2.1 percent. Universal Stainless (USAP) and Olympic Steel (ZEUS) are turning in two of the sector's worst performances.

Airline, railroad, and electronic storage stocks have also come under pressure on the day, while some strength is visible among pharmaceutical and tobacco stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday following the rally seen on Wall Street overnight. Japan's Nikkei 225 Index jumped by 1.1 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.

The major European markets also moved to the upside on the day. While the German DAX Index rose by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both climbed by 0.6 percent.

In the bond market, treasuries are showing a lack of direction amid the choppy trading on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.026 percent.