Stocks Turning In Strong Performance In Early Trading - U.S. Commentary

(RTTNews) - Stocks have moved notably higher in early trading on Monday, regaining some ground following the steep losses posted last week. The major averages are adding to last Friday's modest gains, further offsetting the weakness seen in the four preceding sessions.

Currently, the major averages are off their highs for the young session but remain firmly in positive territory. The Dow is up 254.88 points or 1.4 percent at 17,967.54, the Nasdaq is up 35.06 points or 0.7 percent at 4,926.27 and the S&P 500 is up 19.96 points or 1 percent at 2,080.98.

The early strength on Wall Street is partly due to bargain hunting following last week's pullback, which dragged the Dow and the Nasdaq down to their lowest intraday levels in over a month last Thursday.

Buying interest was also generated by comments from People's Bank of China governor Zhou Xiaochuan that generated optimism about additional stimulus.

Xiaochuan said the Chinese economy has slowed "a bit too sharply" and warned the country needs to be vigilant about signs of deflation.

News on the merger-and-acquisition front has also generated some positive sentiment, with Hyperion Therapeutics (HPTX) and Auspex Pharmaceuticals (ASPX) posting standout gains after agreeing to be acquired by Horizon Pharma (HZNP) and Teva (TEVA), respectively.

On the economic front, the National Association of Realtors released a report showing that pending home sales jumped to their highest level in twenty months in February.

NAR said its pending home sales index surged up 3.1 percent to 106.9 in February after climbing 1.2 percent to a slightly downwardly revised 103.7 in January. Economists had expected the index to edge up by 0.3 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

With the bigger than expected increase, the pending home sales index reached its highest level since hitting 109.4 in June of 2013.

Traders are also digesting a report from the Commerce Department showing that personal income rose by slightly more than expected in the month of February.

The Commerce Department said personal income climbed by 0.4 percent in February, matching the upwardly revised increase seen in January.

Economists had been expecting income to rise by 0.3 percent, which would have matched the growth originally reported for the previous month.

Meanwhile, the report also showed that personal spending inched up by 0.1 percent in February after dipping by 0.2 percent in January. Spending had been expected to edge up by 0.2 percent.

Banking stocks have shown a strong move to the upside in early trading, driving the Dow Jones Banks Index up by 1.8 percent. The gain by the index comes after it ended the previous session at its lowest closing level in well over a month.

Telecom, energy, and utilities stocks are also seeing considerable strength, while gold stocks are bucking the uptrend.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index advanced by 0.7 percent, while Hong Kong's Hang Seng Index surged up by 1.5 percent.

The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index has risen by 0.6 percent, the French CAC 40 Index is up by 1 percent and the German DAX Index is up by 1.7 percent.

In the bond market, treasuries are showing a lack of direction, lingering near the unchanged line. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.944 percent.