Stocks Moderately Higher Amid Increase In Oil Prices - U.S. Commentary

(RTTNews) - While buying interest has remained somewhat subdued, stocks are seeing some strength in mid-day trading on Friday. The gains on the day are partly offsetting recent weakness, with the major averages moving higher following five straight losing sessions.

Currently, the major averages are holding on to moderate gains. The Dow is up 35.45 points or 0.2 percent at 17,356.16, the Nasdaq is up 22.57 points or 0.5 percent at 4,593.39 and the S&P 500 is up 8.65 points or 0.4 percent at 2,001.32.

The strength on Wall Street may be partly due to bargain hunting following the recent pullback, which dragged the major averages down to their lowest levels in about a month.

Buying interest has also been generated by an increase by the price of crude oil, with crude for February delivery climbing $1.34 to $47.59 a barrel.

Prices were boosted when the International Energy Agency said the collapse in oil prices is expected to curtail non-OPEC oil production this year.

"A price recovery--barring any major disruption--may not be imminent, but signs are mounting that the tide will turn," the IEA said as it slashed its forecast for an increase in non-OPEC oil supply this year by 350,000 barrels a day.

Meanwhile, traders also continue to digest the Swiss National Bank's surprise decision to remove its currency cap as well as another batch of U.S. economic data.

Before the start of trading, the Labor Department released a report showing that consumer prices saw the biggest decrease in six years in December amid another sharp drop in energy prices.

The Labor Department said its consumer price index fell by 0.4 percent in December, reflecting the biggest monthly decrease since December of 2008.

Excluding food and energy prices, the Labor Department said the core consumer price index came in unchanged in December after edging up by 0.1 percent in November.

A separate report from the Federal Reserve showed a modest pullback in industrial production in December, while the University of Michigan said its consumer sentiment index jumped to an eleven-year high in January.

Sector News

Gold stocks are seeing considerable strength in mid-day trading, driving the NYSE Arca Gold Bugs Index up by 3.5 percent. The gain extends a recent upward move by the index, which has reached its best intraday level in over three months.

The strength among gold stocks comes amid a notable increase by the price of the precious metal, with gold for February delivery climbing $14.20 to $1,279 an ounce.

Significant strength is also visible among oil service stocks, which are moving higher along with the price of crude oil. The Philadelphia Oil Service Index is jumping by 2.9 percent after ending the previous session at its worst closing level in over three years.

The rebound by the price of crude oil has also contributed to strength among other energy stocks, while steel and housing stocks are also showing notable moves to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index tumbled by 1.4 percent, while Hong Kong's Hang Seng Index dropped by 1 percent.

Meanwhile, the major European markets moved to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 0.8 percent, the French CAC 40 Index and the German DAX Index jumped by 1.3 percent and 1.4 percent, respectively.

In the bond market, treasuries have climbed off their worst levels but continue to see modest weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.8 basis points at 1.793 percent.