Strength On Wall Street Lifts S&P 500 To Record High - U.S. Commentary

(RTTNews) - After moving notably higher in early trading on Monday, stocks have seen some further upside over the course of the trading session. The strong advance on the day is extending the upward trend seen earlier this month.

The major averages are currently just off their best levels of the day. The Dow is up 185.22 points or 1.2 percent at 16,288.51, the Nasdaq is up 45.71 points or 1.1 percent at 4,309.12 and the S&P 500 is up 21.64 points or 1.2 percent at 1,857.89.

The strength on Wall Street partly reflects the recent upward momentum for the markets, which has largely offset the sharp pullback seen in late January.

With the gains, the S&P 500 has reached a new record intraday high, while the Nasdaq has risen to its best levels in almost fourteen years.

The Dow remains well below the record highs set late last year but has climbed well off the three-month closing low set on the first trading day of February.

Peter Boockvar, chief market analyst at the Lindsey Group, said the rally by stocks reflects an enormous faith in the Federal Reserve.

"Faith that either [Fed Chair Janet] Yellen will blink in the face of the weak economic data and not follow thru with a continuation of tapering," Boockvar said.

He added, "Or the belief that the economy will soon rebound off the weather induced weakness and thus the Fed will be able to pull off a seamless end to QE without much economic impact."

Later this week, trading could be impacted by the release of reports on new home sales, durable goods orders, home prices, and consumer confidence.

Yellen is also scheduled to testify before the Senate Banking Committee on Thursday after her originally scheduled appearance before the committee was postponed due to a snowstorm in Washington.

Among individual stocks, shares of RF Micro Devices (RFMD) and TriQuint Semiconductor (TQNT) are moving sharply higher after the chipmakers announced a definitive merger agreement.

Apparel retailer Jos. A. Bank (JOSB) is also turning in a strong performance after Men's Wearhouse (MW) raised its cash tender offer for all outstanding shares of the company to $63.50 per share from $57.50 per share.

On the other hand, shares of HSBC (HSBC) have moved to the downside after the financial giant reported a 9 percent increase in its full year pre-tax profits but still missed analyst estimates.

Sector News

Oil service stocks have shown a substantial move to the upside on the day, driving the Philadelphia Oil Service Index up by 2.6 percent. With the gain, the index has reached its best intraday level in almost two months.

A notable increase by the price of crude oil is contributing to the strength in the oil service sector, with crude for April delivery climbing $1.12 to $103.32 a barrel.

The increase by the price of crude oil is also contributing to strength among oil producer stocks, as reflected by the 2 percent advance by the NYSE Arca Oil Index.

Considerable strength has also emerged among electronic storage stocks, resulting in a 2.2 percent gain by the NYSE Arca Disk Drive Index. Datalink (DTLK) and Imation (IMN) are posting notable gains.

Natural gas, tobacco, defense, and financial stocks are also seeing significant strength, 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 Monday. Japan's Nikkei 225 Index edged down by 0.2 percent, while Singapore's Straits Times Index crept up by 0.2 percent.

Meanwhile, the major European markets all moved to the upside over the course of the session. While the French CAC 40 Index advanced by 0.9 percent, the German DAX Index and the U.K.'s FTSE 100 Index rose by 0.5 percent and 0.4 percent, respectively.

In the bond market, treasuries have moved modestly lower amid the rally on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.4 basis points at 2.748 percent.