News Column

Stocks Extending Upward Move, Dow And S&P 500 Set New Highs - US Commentary

June 9, 2014

WASHINGTON (Alliance News) - After initially showing a lack of direction, stocks have moved mostly higher over the course of the trading day on Monday. The gains are extending the upward move seen in the two previous sessions, with the Dow and the S&P 500 reaching new record highs.

The major averages have recently pulled back off their best levels of the day but remain firmly positive. The Dow is up 39.40 points or 0.2% at 16,963.68, the Nasdaq is up 22.79 points or 0.5% at 4,344.19 and the S&P 500 is up 5.26 points or 0.3% at 1,954.70.

The strength that has emerged on Wall Street partly reflects the recent upward momentum for the markets, with the major averages extending the upward trend seen over the past month.

Positive sentiment has also been generated by upbeat economic data from Japan and China, which has led to optimism about the global economy.

A report from Japan'sCabinet Office showed that the nation's GDP rose 1.6% in the first quarter, faster than the 1.5% growth estimated initially.

Additionally, China'sGeneral Administration of Customs said the Chinese trade surplus widened to USD35.9 billion in May amid a 7% year-over-year jump in exports.

Nonetheless, trading activity has remained somewhat subdued amid a lack of major US economic data on the day.

Some key data is scheduled to be released later in the week, including reports on retail sales, producer prices, and consumer sentiment.

Among individual stocks, shares of Idenix Pharmaceuticals (IDIX) have shown a substantial move to the upside after the biopharmaceutical company agreed to be acquired by drug giant Merck (MRK) for approximately USD3.85 billion.

Hittite Microwave (HITT) is also moving sharply higher after the chipmaker agreed to be acquired by Analog Devices (ADI) for USD78 per share in cash.

On the other hand, shares of Tyson Foods (TSN) have moved to the downside amid reports that the meat producer has won the battle to acquire Hillshire Brands (HSH) for about USD63 per share in cash.

Sector News

Biotechnology stocks are seeing significant strength in mid-day trading, resulting in a 1.5% gain by the NYSE Arca Biotechnology Index. The gain extends a recent upward move by the index, which has reached its best intraday level in over two months.

While Idenix is leading the sector higher, Nektar Therapeutics (NKTR) and Pharmacyclics (PCYC) are also posting standout gains on the day.

Considerable strength has also emerged among banking stocks, as reflected by the 1.2% gain being posted by the Dow Jones Banks Index. With the gain, the index has reached a two-month intraday high.

Defense, housing, and electronic storage stocks are also turning in strong performances, while some weakness is visible among utilities stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan'sNikkei 225 Index rose by 0.3%, while Hong Kong'sHang Seng Index advanced by 0.7%.

The major European markets also showed modest moves to the upside on the day. The UK'sFTSE 100 Index, the French CAC 40 Index and the German DAX Index all edged up by 0.2% on the day.

In the bond market, treasuries are seeing modest weakness, extending a recent downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.3 basis points at 2.62%.

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Source: Alliance News

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