Stocks Continue To Perform Well In Mid-Day Trading

While buying interest has waned from earlier in the session stocks remain mostly positive in mid-day trading on Friday. The gains on the day have offset the modest losses posted in the previous session, although the Dow continues to face resistance near the 14,000 level.

In recent trading, the Dow has pulled back well off its best levels but remains up 52.85 points or 0.4 percent at 13,996.90. The tech-heavy Nasdaq is up 29.81 points or 0.9 percent at 3,194.94, while the S&P 500 is up 7.82 points or 0.5 percent at 1,517.21.

The strength on Wall Street is partly due to a positive reaction to a Commerce Department report showing a much narrower than expected U.S. trade deficit for the month of December, with the data potentially leading to an upward revision to the disappointing fourth quarter GDP data.

The report showed that the U.S. trade deficit narrowed to $38.5 billion in December from a revised $48.6 billion in November, while economists had expected the deficit to shrink to $46.0 billion.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said the much narrower than expected trade deficit "pretty much guarantees that the dip in fourth-quarter GDP will be revised to a small gain in the second estimate."

The initial report on fourth quarter GDP showed a 0.1 percent contraction compared to economist estimates for an increase of about 1.0 percent.

In a positive sign for the global economy, a separate report released by the Chinese National Bureau of Statistics earlier in the day showed that the Chinese trade surplus came in at $29.2 billion in January compared to the $24.2 billion surplus expected by economists.

However, the upward move may be being exaggerated by light volume, with a number of traders away from their desks amid a blizzard warning for New York and large parts of the Northeast.

Sector News

Health insurance stocks have shown a strong move to the upside on the day, resulting in a 2.4 percent gain by the Morgan Stanley Healthcare Payor Index. With the gain, the index has reached a new record intraday high.

Molina Healthcare (MOH) has helped to lead the health insurance sector higher, surging up by 9.5 percent after reporting much better than expected fourth quarter earnings and providing upbeat guidance.

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Considerable strength is also visible among computer hardware stocks, as reflected by the 1.1 percent gain being posted by the NYSE Arca Computer Hardware Index. Apple (AAPL) is posting a notable gain, extending the upward move seen late in the previous session.

Biotechnology, semiconductor, and healthcare provider stocks are also posting strong gains in mid-day trading, moving to the upside along with most of the major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday. Australia's All Ordinaries Index advanced by 0.7 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent. However, Japan's Nikkei 225 Index bucked the uptrend and tumbled by 1.8 percent.

The major European markets moved to the upside on the day. While the French CAC 40 Index surged up by 1.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index rose by 0.8 percent and 0.6 percent, respectively.

In the bond market, treasuries have climbed well off their worst levels but continue to see modest weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.3 basis points at 1.964 percent.

2 thoughts on “Stocks Continue To Perform Well In Mid-Day Trading

  1. Hello MarketClub Associates,

    I populate my MC Watchlist with stocks that I add during the course of my reading, listening and researching. When I receive a MarketClub Alert in my inbox that a ticker on my watchlist hits a Green Monthly Triangle, and assuming some other indicators are positive, I either buy it immediately or I put it into a separate MC Watchlist populated only by recently triggered Green Monthly MarketClub Alerts. For the most part, it works real well.

    However, when there is a lag in newly created Green Monthly MarketClub Alerts and I would like to add to my portfolio or replace a recently sold position, I go to my MarketClub Green MonthlyWatchlist and pick a new one to buy. Therein lays the weak link in my system. I have maybe 25 tickers nicely indentified by their scores and triangles. How do I prioritize them, by score? If so, and I have ten with '100' scores, how are they then prioritized?

    I hope that my system works well for fellow MC members.



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