Stocks Remain Mostly Positive In Reaction To ECB Stimulus - U.S. Commentary

(RTTNews) - With traders reacting positively to the European Central Bank's monetary policy announcement, stocks are mostly higher in mid-day trading on Thursday. The markets are extending the upward move seen over the three previous sessions.

The major averages have pulled back off their highs for the session in recent trading but remain firmly positive. The Dow is up 111.35 points or 0.6 percent at 17,665.63, the Nasdaq is up 40.27 points or 0.9 percent at 4,707.69 and the S&P 500 is up 13.15 points or 0.7 percent at 2,045.27.

The strength on Wall Street comes on the heels of European Central Bank President Mario Draghi's announcement of an expanded asset purchase program.

Draghi said the ECB will purchase 60 billion euros per month worth of securities, including investment grade sovereign bonds, beginning in March.

The expanded asset purchase program is currently scheduled to last until September of 2016, although Draghi said purchases would continue until there is a sustained improvement in inflation.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "The action in stocks is just Pavlovian to any form of central bank accommodation and today is no different."

"The transmission though of these newly printed euros into actual stock purchases is specious and thus buying stocks on ECB QE news is more superstition than based on substance in the U.S.," he added.

The news out of Europe has largely overshadowed a recent report from the Labor Department showing a modest drop in first-time claims for U.S. unemployment benefits in the week ended January 17th.

The report said initial jobless claims fell to 307,000, a decrease of 10,000 from the previous week's revised level of 317,000. Economists had expected jobless claims to slide to 300,000.

Sector News

Extending a recent recovery, banking stocks are seeing considerable strength in mid-day trading. The Dow Jones Banks Index has surged up by 2.3 percent, climbing further off the three-month closing low it set last Thursday.

KeyCorp (KEY) has helped to lead the banking sector higher, jumping by 5.7 percent after reporting better than expected fourth quarter earnings.

Transportation stocks are also turning in a strong performance on the day, as reflected by the 2 percent gain being posted by the Dow Jones Transportation Average.

Within the transportation sector, Southwest Airlines (LUV), Union Pacific (UNP), and United Continental (UAL) are posting notable gains after reporting their quarterly results.

Computer hardware, internet, and retail stocks are also seeing considerable strength, while weakness is visible among energy and networking stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index rose by 0.3 percent, while Hong Kong's Hang Seng Index advanced by 0.7 percent.

The major European markets have also moved to the upside on the day. While the U.K's FTSE 100 Index jumped by 1 percent, the German DAX Index and the French CAC 40 Index surged up by 1.3 percent and 1.5 percent, respectively.

In the bond market, treasuries are seeing modest weakness, extending the downward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.7 basis points at 1.87 percent.