News Column

Upbeat Economic Data Leads To Early Strength On Wall Street - US Commentary

May 27, 2014

WASHINGTON (Alliance News) - With traders reacting positively to the latest batch of US economic data, stocks have moved mostly higher in early trading on Tuesday. The major averages have all climbed into positive territory, with the S&P 500 reaching a new record intraday high.

In recent trading, the major averages have seen some further upside, reaching new highs for the young session. The Dow is up 67.59 points or 0.4% at 16,673.86, the Nasdaq is up 36.46 points or 0.9% at 4,222.27 and the S&P 500 is up 9.43 points or 0.5% at 1,909.96.

The early strength on Wall Street is partly due to the release of a report from the Commerce Department showing an unexpected increase in durable goods orders in the month of April.

The report said durable goods orders increased by 0.8% in April after surging up by an upwardly revised 3.6% in March.

The continued growth came as a surprise to economists, who had expected orders to drop by 0.7% compared to the 2.9 jump that had been reported for the previous month.

Excluding an increase in orders for transportation equipment, durable goods orders edged up by a more modest 0.1% in April.

Positive sentiment has also been generated by a separate report from the Conference Board showing that consumer confidence improved in line with economist estimates in the month of May.

The Conference Board said its consumer confidence index climbed to 83.0 in May from a downwardly revised 81.7 in April.

Economists had been expecting the index to edge up to 83.0 from the 82.3 originally reported for the previous month.

Biotechnology stocks have shown a strong move to the upside in early trading, driving the NYSE Arca Biotechnology Index up by 1.6%. With the gain, the index has reached its best intraday level in well over a month.

Significant strength has also emerged among networking stocks, as reflected by the 1.3% gain being posted by the NYSE Arca Networking Index. The index has also reached a one-month high.

Financial, internet, and computer hardware stocks are also seeing early strength, while gold stocks have come under pressure amid a decrease by the price of the precious metal.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan'sNikkei 225 Index crept up 0.2%, while Hong Kong'sHang Seng Index edged won by 0.1%.

Meanwhile, the major European markets have all moved on the upside on the day. While the French CAC 40 Index has risen by 0.2%, the UK'sFTSE 100 Index and the German DAX Index are both up by 0.5%.

In the bond market, treasuries are seeing modest weakness on the heels of the upbeat economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.2 basis points at 2.548%.

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Source: Alliance News

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