Stocks Show Strong Move Back To The Upside In Early Trading - U.S. Commentary

(RTTNews) - Stocks have moved sharply higher in early trading on Monday, partly offsetting the notable weakness that was seen last week. The major averages have climbed firmly into positive territory but remain well off their recent highs.

The major averages have seen some further upside in recent trading, reaching new highs for the young session. The Dow is up 169.58 points or 1.1 percent at 15,924.94, the Nasdaq is up 40.41 points or 1 percent at 4,041.39 and the S&P 500 is up 16.04 points or 0.9 percent at 1,791.36.

The early strength on Wall Street is partly due to bargain hunting following last week's pullback, which dragged the Dow and the S&P 500 to their lowest levels in a month.

Buying interest was also generated by the release of some strong economic data from overseas, including an upbeat report on European private sector activity.

The report from Markit Economic showed that its composite output index for Europe rose 0.4 points to 52.1 in December. The manufacturing index rose 1.1 points to 52.7, while the service sector index edged down 0.2 points to 51.

Meanwhile, traders seem to have shrugged off recent concerns about the outlook for the Federal Reserve's stimulus program.

While the Fed is due to announce its latest monetary policy decision on Wednesday, most economists do not expect the central bank to reveal plans to begin scaling back its asset purchase program.

Semiconductor stocks have shown a notable move to the upside in early trading, driving the Philadelphia Semiconductor Index up by 1.8 percent. LSI Corp. (LSI) is leading the sector higher after agreeing to be acquired by Avago Technologies (AVGO) for $6.6 billion in cash.

Considerable strength has also emerged among biotechnology stocks, as reflected by the 1.7 percent gain being posted by the NYSE Arca Biotechnology Index.

Electronic storage, utilities, and railroad stocks are also seeing early strength, moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index tumbled by 1.6 percent, while Hong Kong's Hang Seng Index ended the day down by 0.6 percent.

Meanwhile, the major European markets have moved to the upside on the day. The U.K.'s FTSE 100 Index is up by 1.3 percent, the French CAC 40 Index is up by 1.6 percent and the German DAX Index is up by 1.9 percent.

In the bond market, treasuries are moving higher, extending the modest upward move seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.9 basis points at 2.839 percent.