INO.com News - Stocks Seeing Modest Strength In Mid-Morning Trading

Stocks Seeing Modest Strength In Mid-Morning Trading - U.S. Commentary

(RTTNews) - Stocks are seeing modest gains in mid-morning trading on Tuesday, as government commitment to accommodative policies continues to reassure traders of a stabilizing economy. The major averages are all in positive territory, attempting to build on yesterday's strong gains.

Traders are digesting the latest economic commentary from San Francisco Federal Reserve Bank Janet Yellen, who continued to reiterate the theme of a mixed economic outlook, which originally began with comments from Atlanta Fed President Dennis Lockhart this morning.

While the Fed officials pointed to a jump in GDP and stabilizing home prices, they stressed cautious optimism amid headwinds in foreclosures, unemployment and bank failures.

Traders have also looked to a set of corporate news to guide some of their moves on the day.

Technology-related stocks have garnered some attention after European Union regulators determined that enterprise software maker Oracle's (ORCL) impending acquisition of Sun Microsystems (JAVA) may violate some anti-trust rules.

Oracle said it plans to vigorously oppose the European Commission' statement of objections on the proposed merger. The company said that it has adequate evidence against the Commission's position regarding the deal.

British bank Barclays (BCS) said its net profit for the nine months ended September 30 declined sharply due to significantly higher impairment charges and other credit provisions. Barclays said its profit for the period fell to 2.73 billion pounds from 3.82 billion pounds a year ago. The stock is down by 5.3 percent.

After the closing bell yesterday, video-game publisher Electronic Arts (ERTS) said that its second quarter loss widened from last year, as revenue fell due to revenue deferral related to certain digital content.

Electronic Arts also said it would close several facilities and cut about 1,500 jobs as part of a plan that will reduce annual costs by at least $100 million. Shares are currently falling by 6.7 percent.

MBIA Inc. (MBI) posted a third quarter loss that narrowed from a year ago, although hefty losses on insured credit derivatives, as well as exposures to mortgage loan securitizations once again led the insurer into the red after two consecutive quarters of profit.

The major averages have moved to the downside in the past few minutes but are currently posting modest gains. The Dow is currently up 20.33 at 10,247.27, the Nasdaq is up 1.12 at 2,155.18 and the S&P 500 is up 1.46 at 1,094.54.

Sector News

Most of the major sectors are showing only modest moves in mid-morning trading, contributing to the lackluster performance by the broader markets.

On the upside, tobacco and healthcare provider stocks are showing considerable strength, with the NYSE Arca Tobacco Index and the Morgan Stanley Healthcare Provider Index up by 1.7 percent and 1 percent, respectively. Despite the gains, the indices remain stuck in recent ranges.

Internet, gold and biotechnology stocks are also on the rise, although they have been unable to break their intraday highs set in recent sessions.

Meanwhile, commercial real estate stocks are notably lower, with the Morgan Stanley REIT Index posting a loss of 1.1 percent, pulling back off of the two week closing high set on Monday.

Stocks Driven By Analyst Comments

Fair Isaac Corp. (FICO) is moving considerably lower in mid-morning trading after being downgraded by Wedbush Morgan from Neutral to Underperform. The stock is currently down by 2.5 percent after hitting a three-month intraday low earlier in the session.

Alcatel-Lucent (ALU) is also retreating following a downgrade by Exane BNP Paribas, which lowered its rating on the stock to Neutral from Outperform based on valuation. The stock is currently down by 5.1 percent, remaining in a range.

On the other hand, TW Telecom Inc. (TWTC) is moving higher after being upgraded by JP Morgan Chase to Overweight from Neutral. The broker also raised its target price on the stock to $17 from $12. Shares have jumped by 8.9 percent, challenging last month's one year high.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Tuesday. Japan's benchmark Nikkei 225 Index rose by 0.6 percent, while Hong Kong's Hang Seng Index edged up by 0.3 percent.

The major European markets are also moving modestly higher, with the U.K.'s FTSE 100 up by 0.1 percent, while the French CAC 40 Index and the German DAX Index are both up by 0.2 percent.

In the bond markets, treasuries are seeing moderate strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 3.448 percent, posting a loss of 3.8 basis points.

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