Stocks Show Strong Upward Move At The Start Of Trading - U.S. Commentary
(RTTNews.com) - Stocks moved sharply higher at the start of trading on Monday, extending the upward move that was seen last week. The major averages all showed strong moves to the upside at the open, with the Nasdaq reaching its best intraday level in almost thirteen years.
While the Dow has seen some further upside in recent trading, the Nasdaq and the S&P 500 have pulled back off their highs. The Dow is up 149.98 points or 1 percent at 15,526.04, the Nasdaq is up 19.38 points or 0.5 percent at 3,741.56 and the S&P 500 is up 13.59 points or 0.8 percent at 1,701.58.
The initial strength on Wall Street was partly due in reaction to news that former Treasury Secretary Larry Summers has withdrawn his name from consideration to replace Federal Reserve Chairman Ben Bernanke amid concerns about a potentially acrimonious confirmation process.
The news has generated some positive sentiment on Wall Street, as Summers was seen as likely to take a more hawkish approach to monetary policy.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "The decision by Larry Summers to withdraw from the race to be the next Fed Chair will persuade many that the current Fed Vice Chair Janet Yellen is now a near-certainty to win the nomination."
"As Yellen is perceived to be the most dovish candidate, we would expect the news to be positive for both bonds and equities on Monday morning," he added.
The markets have also benefited from easing concerns about Syria following news that the U.S. and Russia have reached an agreement on a deal to eliminate Syria's chemical weapons by mid-2014.
Housing stocks have shown a substantial upward move in early trading, driving the Philadelphia Housing Sector Index up by 2.5 percent. With the gain, the index has reached its best intraday level in well over a month.
Commercial real estate and steel stocks are also seeing considerable strength, with the Morgan Stanley REIT Index and the NYSE Arca Steel Index up by 1.8 percent and 1.6 percent, respectively.
Health insurance, transportation, and software stocks are also seeing early strength, moving higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday, although the Japanese markets were closed for a public holiday. Hong Kong's Hang Seng Index surged up by 1.5 percent, while Australia's All Ordinaries Index rose by 0.5 percent.
The major European markets have also moved to the upside on the day. While the German DAX Index has jumped by 1.2 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are up by 0.9 percent and 0.8 percent, respectively.
In the bond market, treasuries have shown a strong upward move on the heels of the news about Summers. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 11 basis points at 2.788 percent.
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