Stocks Posting Substantial Gains In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving notably higher in early trading, stocks have seen some further upside over the course of the trading day on Tuesday. The gains on the day have lifted the S&P 500 to a new record high, while the Nasdaq has reached its best levels since 2000.

Currently, the major averages are posting strong gains, near their highs for the session. The Dow is up 129.93 points or 0.8 percent at 16,956.53, the Nasdaq is up 50.03 points or 1.1 percent at 4,458.21 and the S&P 500 is up 13.35 points or 0.7 percent at 1,973.58.

The early strength on Wall Street was partly due to the release of Chinese manufacturing data showing faster growth in the sector.

A report from the China Federation of Logistics and Purchasing and the National Bureau of Statistics showed that their reading on Chinese manufacturing activity climbed to a six-month high of 51.0 in June from 50.8 in May.

Revised estimates released by Markit and HSBC confirmed that Chinese manufacturing activity rebounded in June, with their index rising to 50.7 from 49.4.

Stocks continued to perform well following the release of a separate report from the Institute for Supply Management showing that the U.S. manufacturing sector unexpectedly grew at a slightly slower rate in the month of June.

The ISM said its purchasing managers index edged down to 55.3 in June from 55.4 in May, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to inch up to 55.8.

Despite the modest decrease, Rob Carnell, chief international economist at ING, noted that the index continues to point to robust growth.

"Such a headline manufacturing ISM figure is consistent with GDP growth of 3.5%, and in all likelihood, the U.S. will grow a good deal faster than that in 2Q14 following the execrable 1Q14 GDP result," Carnell said.

Traders have largely shrugged off a separate report from the Commerce Department showing that construction spending increased by much less than expected in the month of May.

Sector News

Biotechnology stocks have shown a substantial move to the upside over the course of the trading day, driving the NYSE Arca Biotechnology Index up by 1.8 percent. With the gain, the index has reached its best intraday level in well over three months.

Regeneron Pharmaceuticals (REGN) has helped to lead the biotech sector higher, jumping by 6.1 percent amid news that Sanofi (SNY) increased its stake in the biopharmaceutical company to 22.5 percent.

Significant strength also remains visible among computer hardware stocks, as reflected by the 1.7 percent gain being posted by the NYSE Arca Computer Hardware Index. The gain has lifted the index to a new record intraday high.

Airline stocks are also turning in a strong performance in mid-day trading, resulting in a 1.7 percent advance by the NYSE Arca Airline Index. SkyWest (SKYW) and Delta (DAL) are turning in two of the sector's best performances.

Internet, semiconductor, healthcare, and brokerage stocks are also seeing notable strength on the day amid broad based buying interest.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan's Nikkei 225 Index surged up by 1.1 percent, while Australia's All Ordinaries Index fell by 0.3 percent. The markets in Hong Kong were closed for a holiday.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index rose by 0.7 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both advanced by 0.9 percent.

In the bond market, treasuries have come under pressure amid the rally on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.2 basis points at 2.558 percent.