26th Feb 2014 15:37
WASHINGTON (Alliance News) - After initially showing a lack of direction, stocks have moved mostly higher in early trading on Wednesday. The major averages have climbed more firmly into positive territory, offsetting the modest weakness seen in the previous session.
The major averages have seen some further upside in recent trading, reaching new highs for the young session. The Dow is up 55.70 points or 0.3% at 16,235.36, the Nasdaq is up 19.13 points or 0.5% at 4,306.72 and the S&P 500 is up 5.69 points or 0.3% at 1,850.81.
The strength that has emerged on Wall Street comes following the release of a report from the Commerce Department showing an unexpected rebound in new home sales in the month of January.
The report said new home sales jumped 9.6% to a seasonally adjusted annual rate of 468,000 in January from the revised December rate of 427,000. Economists had expected sales to drop to an annual rate of 400,000.
With the unexpected increase, new home sales rose to their highest level since hitting an annual rate of 477,000 in July of 2008.
Housing stocks have moved sharply higher on the heels of the news, with the Philadelphia Housing Sector Index jumping by 1.9%. With the gain, the index has reached its best intraday level in well over six years.
Considerable strength has also emerged among retail stocks, as reflected by the 1.4% gain being posted by the Dow Jones Retail Index. A positive reaction to earnings news from Lowe's (LOW) and Target (TGT) is contributing to the strength in the sector.
Target reported fourth quarter earnings that fell sharply year-over-year due to the massive data breach over the holidays, but the discount retailer still beat analyst estimates.
Home improvement retailer Lowe's reported fourth quarter earnings that matched analyst estimates and said its board has authorized the repurchase of an additional USD5 billion of the company's common stock.
Semiconductor, computer hardware, and defense stocks are also seeing early strength, although some weakness remains visible among natural gas, biotechnology, and gold stocks.
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index dropped by 0.5%, while Hong Kong's Hang Seng Index rose by 0.5%.
Meanwhile, the major European markets have all moved lower on the day. While the UK's FTSE 100 Index has slid by 0.5%, the French CAC 40 Index and the German DAX Index are down by 0.6% and 0.7%, respectively.
In the bond market, treasuries are seeing modest strength despite the upbeat new home sales data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1 basis point at 2.691%.
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