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

(RTTNews) - Adding to the gains posted in the previous session, stocks remain mostly positive in mid-day trading on Tuesday. With the upward move, the major averages have further offset the sharp pullback that was seen late last week.

Currently, the major averages are all in positive territory, although the Nasdaq is up only 6.34 points or 0.1 percent at 4,975.26. The Dow is up 69.71 points or 0.4 percent at 17,321.33, and the S&P 500 is up 6.80 points or 0.3 percent at 2,027.95.

The strength on Wall Street may partly reflect optimism about the possibility of further Chinese stimulus following statements from government officials.

At the end of the Chinese government's Central Economic Work Conference, officials said monetary policy must be more "flexible" and fiscal policy more "forceful" to halt the country's economic slowdown.

The comments contributed to a rebound by China's Shanghai Composite Index as well as strength in other emerging markets.

An increase by the price of crude oil has also generated some buying interest, with crude for February delivery climbing $0.66 to $36.47 a barrel in its first day as the front-month contract.

Nonetheless, traders seem somewhat reluctant to make significant moves ahead of the Christmas Day holiday on Friday.

On the U.S. economic front, the Commerce Department released a report before the start of trading showing a slight downward revision to third quarter economic growth.

The report said real gross domestic product increased by 2.0 percent in the third quarter compared to the previously estimated 2.1 percent growth. The downward revision matched economist estimates.

The Commerce Department said the slightly slower than previously estimated GDP growth primarily reflected a downward revision to private inventory investment.

Meanwhile, the National Association of Realtors released a separate report showing that existing home sales tumbled to their lowest level in well over a year in November.

NAR said existing home sales plunged 10.5 percent to an annual rate of 4.76 million in November from a downwardly revised 5.32 million in October.

Economist had expected existing home sales to edge down to a rate of 5.32 million from the 5.36 million originally reported for the previous month.

With the bigger than expected decrease, existing home sales fell to their lowest rate since hitting 4.75 million in April of 2014.

Sector News

Many of the major sectors are showing only modest moves, although significant strength has emerged among energy stocks. The strength in the sector comes amid the increase by the price of crude oil.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index has surged up by 2.4 percent, while the NYSE Arca Oil & Gas Index and the NYSE Arca Natural Gas Index are up by 1.4 percent and 1.2 percent, respectively.

Steel stocks also continue to turn in a strong performance amid optimism additional Chinese stimulus could boost demand. The NYSE Arca Steel Index is up by 2.5 percent, climbing further off the record closing low set last Thursday.

Considerable strength is also visible among railroad stocks, as reflected by the 2 percent gain being posted by the Dow Jones Railroads Index. The index is bouncing off yesterday's two-year closing low.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Hong Kong's Hang Seng Index and Australia's All Ordinaries Index both edged up by 0.2 percent. However, Japan's Nikkei 225 Index bucked the uptrend and dipped 0.2 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index advanced by 0.8 percent and the French CAC 40 Index inched up by 0.1 percent.

In the bond market, treasuries are seeing modest weakness after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.3 basis points at 2.220 percent.