Stocks Move Modestly Higher On HP Earnings, Housing Data - U.S. Commentary

(RTTNews) - Stocks have moved modestly higher in early trading on Friday, adding to the gains posted in the two previous sessions. The major averages have all climbed into positive territory, although buying interest has remained somewhat subdued.

In recent trading, the major averages have seen some further upside, reaching new highs for the young session. The Dow is up 45.80 points or 0.3 percent at 16,588.88, the Nasdaq is up 10.66 points or 0.3 percent at 4,165.00 and the S&P 500 is up 4.46 points or 0.2 percent at 1,896.95.

The early strength on Wall Street partly reflects a positive reaction to earnings news from Hewlett-Packard (HPQ), with the tech giant jumping by 5.9 percent in early trading.

After the close of trading on Thursday, HP reported second quarter earnings that were in line with estimates, although its revenues came in below expectations. The company also revealed plans to cut 16,000 more jobs.

Positive sentiment has also recently been generated by the release of a report from the Commerce Department showing that new home sales came in above economist estimates in April.

The Commerce Department said new home sales jumped 6.4 percent to a seasonally adjusted annual rate of 433,000 in April from the revised March rate of 407,000. Economists had expected new home sales to climb to a rate of 420,000.

The revised rate for March represents a substantial upward revision from the 384,000 originally reported, although it still represents a six-month low.

Housing stocks have moved notably higher following the release of the report, driving the Philadelphia Housing Sector Index up by 1.3 percent. The index is currently on pace to end the session at its best closing level in over a month.

Airline, railroad, and semiconductor stocks are also seeing some early strength, while most of the other major sectors are showing only modest moves.

The lack of conviction behind the upward move by the broader markets comes as some traders are away from their desks, getting a head start on the long Memorial Day weekend.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index edged up by 0.1 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index has dipped by 0.1 percent, the French CAC 40 Index is just above the unchanged line and the German DAX Index is up by 0.2 percent.

In the bond market, treasuries are moving modestly higher following the pullback seen in the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.3 basis points at 2.532 percent.