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Stocks Move Mostly Higher, Lifting Dow To Record Intraday High - US Commentary

May 12, 2014

WASHINGTON (Alliance News) - Stocks have moved mostly higher in early trading on Monday after turning in a mixed performance last week. The major averages have all climbed firmly into positive territory, with the Dow reaching a new record intraday high.

Currently, the major averages are positing notable gains, near their highs for the young session. The Dow is up 105.58 points or 0.6% at 16,688.92, the Nasdaq is up 44.82 points or 1.1% at 4,116.69 and the S&P 500 is up 13.16 points or 0.7% at 1,891.64.

The early strength on Wall Street is partly due to news of Chinese market reforms designed to increase liquidity, which has helped to offset concerns about the situation in Ukraine.

Pro-Russian separatists in the Donetsk region of eastern Ukraine claim nearly 90% of voters in the region were in favor of self rule in a referendum held on Sunday, although the vote has been condemned as illegal by Kiev and Western governments.

"Optimism about capital market reforms in China helped markets to look past the farce of a referendum in the Donetsk region of Ukraine," said Peter Boockvar, chief market analyst at the Lindsey Group.

He added, "While vague and stated 6 months ago after the Chinese plenum, investors seized on the Chinese State Council repeating their desire to further liberalize China finance in areas such as IPO's and foreign investment in state owned companies."

Additional news on the merger-and-acquisition front has also generated some positive sentiment, with shares of Pinnacle Foods (PF) surging higher after the company agreed to be acquired by Hillshire Brands (HSH) in a cash and stock transaction valued at approximately USD6.6 billion.

Steel stocks have shown a particularly strong move to the upside in early trading, driving the NYSE Arca Steel Index up by 2.1%. Optimism about the impact of the Chinese market reforms may be contributing to the strength in the sector.

Networking, internet, gold, and airline stocks are also seeing significant strength, moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index fell by 0.4%, while Hong Kong'sHang Seng Index surged up by 1.8%.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has surged up by 1.3%, the UK'sFTSE 100 Index and the French CAC 40 Index are up by 0.4% and 0.3%, respectively.

In the bond market, treasuries are seeing modest weakness, extending the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.8 basis points at 2.641%.

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Source: Alliance News