Stocks Moving Mostly Higher In Mid-Day Trading - U.S. Commentary

(RTTNews) - After initially showing a lack of direction, stocks have moved mostly higher over the course of the trading day on Friday. The modest strength that has emerged on Wall Street has helped to lift the Dow off yesterday's three-month closing low.

Currently, the major averages are posting moderate gains, near their highs for the session. The Dow is up 83.97 points or 0.5 percent at 16,452.24, the Nasdaq is up 14.68 points or 0.3 percent at 4,349.64 and the S&P 500 is up 9.29 points or 0.5 percent at 1,918.86.

Stocks may be benefiting from optimism about a potential de-escalation of the crisis in eastern Ukraine following comments from Nikolai Patrushev, Secretary of the Russian Security Council.

Patrushev told Russian news agency RIA Novosti that Russia is ready to mediate talks between the Ukrainian government and pro-Russian separatists.

"We are interested in peace in Ukraine and in bringing the sides to the negotiating table so that they could settle their disputes," Patrushev told RIA in an interview. "Russia will continue to make every effort for the soonest de-escalation of tensions."

He added, "As for mediation, of course, we are ready to assist in the process of the discussion and we have said so on numerous occasions."

The upbeat news out of Russia helped offset concerns generated by news that President Barack Obama authorized U.S. airstrikes against Islamic militants in northern Iraq in an effort to protect American interests and personnel in the region.

In a brief nationally televised speech Thursday evening, Obama said that U.S. action - taken at the request of the Iraqi government - will also include what he called humanitarian relief in the face of genocide.

Obama stressed that American combat troops will not be returning to fight in Iraq, providing some confidence that U.S. involvement will be limited.

On the economic front, the Labor Department released a report before the start of trading showing that labor productivity increased by more than anticipated in the second quarter, contributing to a smaller than expected increase in labor costs.

The report said labor productivity climbed by 2.5 percent in the second quarter compared to economist estimate for an increase of 1.5 percent.

The Labor Department also said unit labor costs edged up by 0.6 percent in the second quarter, well below the 1.4 percent growth expected by economists.

Sector News

Housing stocks have shown a particularly strong move to the upside on the day, driving the Philadelphia Housing Sector Index up by 1.4 percent. With the gain, the index has climbed further off the seven-month closing low that it set last week.

M/I Homes (MHO), Ryland Group (RYL), and Standard Pacific (SPF) are turning in some of the housing sector's best performances.

Considerable strength has also emerged among utilities stocks, as reflected by the 1.3 percent gain being posted by the Dow Jones Utilities Average. The average continues to recover from Wednesday's four-month closing low.

Natural gas, retail, and semiconductor stocks are also seeing some strength on the day, although buying interest has remained somewhat subdued.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index plunged by 3 percent, while Hong Kong's Hang Seng Index dipped by 0.3 percent.

The major European markets also moved to the downside on the day. While the French CAC 40 Index edged down by 0.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index fell by 0.3 percent and 0.5 percent, respectively.

In the bond market, treasuries are extending a recent upward trend amid lingering geopolitical concerns. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.6 basis points at 2.388 percent.