Stocks Holding Firmly In Positive Territory In Mid-Day Trading - U.S. Commentary

(RTTNews) - Extending the recovery rally seen in the previous session, stocks are posting strong gains in mid-day trading on Thursday. The gains on the day are partly offsetting the sell-off that was seen over the past couple weeks.

Currently, the major averages remain firmly in positive territory. The Dow is up 273.45 points or 1.7 percent at 16,558.96, the Nasdaq is up 91.62 points or 2 percent at 4,789.16 and the S&P 500 is up 36.91 points or 1.9 percent at 1,977.42.

The continued strength on Wall Street comes as stocks are once again benefiting from bargain hunting following the steep drop seen over the six sessions preceding Wednesday.

The gains posted yesterday helped to lift the major averages well off the multi-month lows set on Tuesday, but they also remain well off their recent highs.

A rally by Chinese stocks has also generated some positive sentiment, with the Shanghai Composite Index soaring by 5.3 percent after falling sharply in recent sessions.

Traders are also reacting to the latest batch of U.S. economic data, including a report showing much stronger than previously estimated economic growth in the second quarter.

The Commerce Department said real gross domestic product increased by 3.7 percent in the second quarter compared to the previously reported 2.3 percent growth.

With the upward revision, the pace of GDP growth in the second quarter was even stronger than the 3.2 percent jump expected by economists.

A separate report from the Labor Department also showed a modest decrease in initial jobless claims in the week ended August 22nd.

Meanwhile, the National Association of Realtors released a report showing that pending home sales rebounded less than expected in July.

Sector News

Most of the major sectors are seeing significant strength on the day, although resource stocks have helped to lead the way higher.

Oil service stocks are posting particularly strong gains in mid-day trading, with the Philadelphia Oil Service Index jumping by 5.6 percent. The index is climbing further off the six-year closing low it set on Tuesday.

The rally by oil service stocks comes amid a sharp increase by the price of crude oil, as crude for October delivery is surging up $2.92 to $41.52 a barrel.

Outside of the resource sector, considerable strength is also visible among chemical stocks, as reflected by the 3.3 percent gain being posted by the Dow Jones Chemicals Index. Dow Chemical (DOW) has helped to lead the sector higher.

Semiconductor, electronic storage, and transportation stocks are also turning in standout performances, reflecting broad based buying interest.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved notably higher following the overnight rally on Wall Street. Japan's Nikkei 225 Index advanced by 1.1 percent, while Hong Kong's Hang Seng Index shot up by 3.6 percent.

The major European markets also saw significant strength on the day. While the German DAX Index jumped by 3.2 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index soared by 3.5 percent and 3.6 percent, respectively.

In the bond market, treasuries have moved modestly lower, extending the pullback seen over the past few days. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.6 basis points at 2.188 percent.