Major Averages Turn Positive After Seeing Initial Weakness

(RTTNews) - After moving to the downside at the open, stocks have turned mostly positive over the course of early trading on Tuesday. The major averages have bounced well off their lows for the young session and climbed modestly above the unchanged line.

The initial weakness on Wall Street partly reflected a negative reaction to a pair of U.S. economic reports showing a bigger than expected drop in housing starts and a bigger than expected increase in consumer prices.

Worries about the ongoing conflict in Iraq also weighed on the markets amid news that Sunni insurgents continue to advance toward Baghdad.

Nonetheless, selling pressure waned not long after the start of trading, as traders seemed reluctant to make significant moves ahead of the Federal Reserve's monetary policy announcement Wednesday afternoon.

The subsequent recovery by the markets is partly due to strength that has emerged among brokerage stocks. The NYSE Arca Broker/Dealer Index has surged up by 1.6 percent amid strong gains by E*Trade (ETFC) and Charles Schwab (SCHW).

Banking, internet, and airline stocks have also moved to the upside, although buying interest has remained somewhat subdued.

Currently, the major averages are posting modest gains, near their best levels of the day. The Dow is up 24.02 points or 0.1 percent at 16,805.03, the Nasdaq is up 19.38 points or 0.5 percent at 4,340.48 and the S&P 500 is up 3.43 points or 0.2 percent at 1,941.21.