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

(RTTNews) - After moving notably higher in early trading, stocks have seen some further upside over the course of the trading day on Wednesday. The gains on the day have partly offset the pullback seen over the past several sessions.

The major averages have moved roughly sideways in recent trading, hovering firmly in positive territory. The Dow is up 248.88 points or 1.4 percent at 18,012.92, the Nasdaq is up 64.37 points or 1.3 percent at 5,078.24 and the S&P 500 is up 25.41 points or 1.2 percent at 2,105.56.

The rally on Wall Street is partly due to bargain hunting, with traders picking up stocks at somewhat reduced levels following the recent weakness.

The Dow ended Tuesday's trading only slightly below the unchanged line, but it still closed lower for the fourth consecutive session and hit its lowest closing level in two months.

Buying interest has also been generated by strength in the European markets, which also rebounded following recent weakness amid upbeat news out of Greece.

However, light trading activity may be exaggerating the upward move, with some traders staying on the sidelines amid another quiet day on the U.S. economic front.

The economic calendar will finally pick up on Thursday with the release of closely watched reports on retail sales and weekly jobless claims.

The data could have an impact on the outlook for monetary policy, although most analysts will likely continue to expect the Federal Reserve to leave interest rates unchanged at its meeting next week.

Among individual stocks, shares of HCC Insurance (HCC) have moved sharply higher after the company announced an agreement to be acquired by Tokio Marine in a $7.5 billion all cash deal.

Streaming video service Netflix (NFLX) is also posting a notable gain after shareholders approved an increase in the company's share authorization, which is seen as a precursor to a stock split.

On the other hand, shares of Mattress Firm (MFRM) have come under pressure after the mattress retailer reported weaker than expected first quarter results.

Sector News

Tobacco stocks continue to see substantial strength in mid-day trading, with the NYSE Arca Tobacco Index surging up by 4.4 percent. With the gain, the index has reached a new record intraday high.

Alliance One (AOI) has helped to lead the tobacco sector higher, jumping 19 percent to its best intraday level in ten months.

Significant strength also remains visible among steel stocks, as reflected by the 2.7 percent gain being posted by the NYSE Arca Steel Index. A.M. Castle (CAS) and Gibraltar Industries (ROCK) are posting standout gains.

Oil service stocks are also turning in a strong performance, resulting in a 2.1 percent gain by the Philadelphia Oil Service Index. The strength in the sector comes as crude oil for July delivery is climbing $0.46 to $60.60 a barrel.

Airline, software, and housing stocks are also seeing notable strength on the day, moving higher along with most of the other major sectors.

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 edged down by 0.3 percent, while Australia's All Ordinaries Index crept up by 0.1 percent.

Meanwhile, the major European markets all moved notably higher the day. While the German DAX Index soared by 2.4 percent, the French CAC 40 Index surged up by 1.8 percent and the U.K.'s FTSE 100 Index jumped by 1.1 percent.

In the bond market, treasuries continue to see considerable weakness, extending their recent sell-off. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.1 basis points at 2.478 percent.