Stocks Remain Mostly Positive In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving mostly higher earlier in the session, stocks continue to turn in a strong performance in mid-day trading on Tuesday. With the strength on the day, the major averages are adding to the gains posted in the two previous sessions.

In recent trading, the major averages have moved roughly sideways, hovering firmly in positive territory. The Dow is up 85.89 points or 0.5 percent at 17,966.74, the Nasdaq is up 24.50 points or 0.5 percent at 4,941.82 and the S&P 500 is up 6.69 points or 0.3 percent at 2,087.31.

The strength on Wall Street partly reflects continued optimism about the outlook for interest rates following last Friday's disappointing jobs report.

Recent economic data pointing to weakness in the first quarter has led to speculation that the Federal Reserve will delay its planned increase in rates.

In an interview with Bloomberg late Monday, Atlanta Fed President Dennis Lockhart said he favors pushing out the first rate hike beyond the next two meetings.

"I would probably be biased toward the July or September dates as opposed to June," said Lockhart, who is a voting member of the Fed's policy committee this year.

He added, "We will have more data and we will give the economy a little more time to prove out the thesis that I laid out, that the first quarter was anomalous again, just like a year ago."

The Fed may provide additional hints about the outlook for interest rates with the release of the minutes of its latest monetary policy meeting on Wednesday.

Trading activity is subsequently somewhat subdued on the day, with a lack of major U.S. economic data also keeping some investors on the sidelines.

Among individual stocks, shares of Informatica (INFA) have moved notably higher after the software company agreed to be acquired by Permira and the Canada Pension Plan Investment Board for approximately $5.3 billion.

Delivery giant FedEx (FDX) has also moved to the upside after announcing a deal to buy Dutch package delivery company TNT Express for $4.8 billion in cash.

On the other hand, shares of Viacom (VIAB) have moved lower after the media company said it will suspend its stock buyback program and record a $785 million pre-tax charge as part of a strategic realignment.

Sector News

Biotechnology stocks continue to see considerable strength in mid-day trading, with the NYSE Arca Biotechnology Index up by 1.7 percent. Despite the gain, the index remains well off the record highs set last month.

Exact Sciences (EXAS), Alexion (ALXN), and BioMarin (BMRN) are turning in some of the biotech sector's best performances on the day.

Significant strength has also emerged among oil service stocks, as reflected by the 1.4 percent gain being posted by the Philadelphia Oil Service Index. The strength in the sector comes as crude oil for May delivery is climbing $1.03 to $53.17 a barrel.

Natural gas, steel, tobacco and railroad stocks have also moved notably higher on the day, while commercial real estate and gold stocks have come under pressure.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index jumped by 1.3 percent, while China's Shanghai Composite Index soared by 2.5 percent.

The major European markets also moved notably higher following a long weekend. While the U.K.'s FTSE 100 Index surged up by 1.9 percent, the French CAC 40 Index and the German DAX Index jumped by 1.5 percent and 1.3 percent, respectively.

In the bond market, treasuries have moved modestly lower, extending the sharp pullback seen on Monday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.7 basis points at 1.921 percent.