Stocks Remain Firmly Positive In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving sharply higher earlier in the session, stocks continue to see considerable strength in mid-day trading on Wednesday. With the upward move, the major averages are adding to the strong gains posted in the two previous sessions.

The major averages have moved roughly sideways in recent trading, hovering firmly in positive territory. The Dow is up 214.76 points or 1.3 percent at 16,411.17, the Nasdaq is up 78.00 points or 1.8 percent at 4,513.95 and the S&P 500 is up 27.02 points or 1.4 percent at 1,922.60.

The continued strength on Wall Street comes amid a sharp increase by the price of crude oil, which has seen considerable volatility in recent sessions.

Crude oil for March delivery is currently jumping $1.85 to $30.89 a barrel after slipping $0.40 to $29.04 a barrel on Tuesday.

The rally by the price of crude oil comes amid news Iranian Oil Minister Bijan Zanganeh has offered support for a plan to maintain a ceiling on oil production.

According to Reuters, Zanganeh told the Shana news agency Iran supports "any effort to stabilize the market and prices."

On the U.S. economic front, the Federal Reserve released a report shortly before the start of trading showing a bigger than expected increase in industrial production in the month of January.

The Fed said industrial production climbed by 0.9 percent in January after falling by a revised 0.7 percent in December. Economists had expected production to rise by 0.4 percent.

A separate report from the Labor Department showed an unexpected uptick in U.S. producer prices in the month of January.

The Labor Department said its producer price index for final demand inched up by 0.1 percent in January after edging down by 0.2 percent in December. Economists had expected another 0.2 percent drop in prices.

Excluding food and energy prices, the core producer price index climbed by 0.4 percent in January compared to estimates for a 0.1 percent uptick.

Meanwhile, the Commerce Department released a report showing an unexpected drop in housing starts in the month of January.

The report said housing starts tumbled 3.8 percent to an annual rate of 1.099 million in January from the revised December estimate of 1.143 million. Economists had expected starts to climb to a rate of 1.175 million.

Building permits, an indicator of future housing demand, also edged down by 0.2 percent to an annual rate of 1.202 million in January from 1.204 million in December.

Later in the day, the Fed is scheduled to release the minutes of its latest monetary policy meeting, which could shed some light on the outlook for interest rates.

Sector News

Steel stocks continue to see substantial strength in mid-day trading, resulting in a 5.4 percent jump by the NYSE Arca Steel Index. With the gain, the index is closing in on its best levels of the new year.

A.M. Castle (CAS) and U.S. Steel (X) are turning in two of the steel sector's best performances, soaring by 22.6 percent and 13.6 percent, respectively.

Considerable strength also remains visible among energy stocks, which are moving sharply higher along with the price of crude oil.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index is up by 4.4 percent, the NYSE Arca Natural Gas Index is up by 4.3 percent and the NYSE Arca Oil & Gas Index is up by 3.5 percent.

Most of the other major sectors have also moved notably higher on the day, with internet, gold semiconductor, and software stocks posting particularly strong gains.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 1.4 percent, while China's Shanghai Composite Index advanced by 1.1 percent.

Meanwhile, the major European markets all moved sharply higher on the day. While the French CAC 40 Index surged up by 3 percent, the U.K.'s FTSE 100 Index and the German DAX Index both jumped by 2.7 percent.

In the bond market, treasuries are extending a recent pullback amid the continued strength on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.5 basis points at 1.833 percent.