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US Market Commentary

Stocks Moving Moderately Higher In Mid-Morning Trading - U.S. Commentary
3/10/2010 10:48 AM ET

TOP MARKET NEWS

Stocks Giving Back Ground In Early Afternoon Trading - U.S. Commentary

Strength Remains Visible On Wall Street In The Late Morning - U.S. Commentary

Yen Plunges To More Than 2-week Lows Against Dollar And Franc

Stocks Moving Moderately Higher In Mid-Morning Trading - U.S. Commentary

Wholesale Inventories Unexpectedly Fell 0.2% In January

(RTTNews) - Stocks are moving mostly higher in mid-morning trading on Wednesday, with the latest inventory figures helping the markets to build on their initial upside. The major averages are all in positive territory, although the advance may be subdued amid a lack of first-tier economic data.

The Commerce Department reported that wholesale inventories unexpectedly showed a modest decrease in the month of January, while the report also showed a notable increase in wholesale sales.

Inventories edged down by 0.2 percent in January following a revised 1.0 percent drop in December. The decrease came as a surprise to economists, who had expected inventories to rise by 0.2 percent versus the 0.8 percent drop originally reported for the previous month.

At the same time, the Commerce Department said that wholesale sales surged up by 1.3 percent in January after increasing by 1.2 percent in the previous month.

At 2:00 p.m. ET, the Treasury Department will unveil its budget for February. Economists anticipate the budget to show a deficit of $222 billion for February following a $42.6 billion deficit in January.

On the corporate front, Abbott Laboratories (ABT) entered an agreement to buy Facet Biotech Corp. (FACT) for $27 per share in cash to further strengthen its biologics capabilities and pharmaceutical pipeline. The net value of the deal is approximately $450 million.

InterMune Inc. (ITMN) announced after the bell Tuesday that the FDA Pulmonary-Allergy Drugs Advisory Committee voted 9-3 to recommend approval of Esbriet, for the treatment of patients with idiopathic pulmonary fibrosis, to reduce decline in lung function. The stock has surged up by more than 66 percent in reaction to the news.

Additionally, apparel retailer J. Crew Group, Inc. (JCG) swung to a fourth quarter profit, helped by higher sales and improved margins. The company's quarterly earnings per share breezed past Wall Street expectations as did its quarterly revenue. Looking ahead, J. Crew forecast fiscal 2010 earnings above analysts' current consensus estimate.

In global economic news, China revealed that its exports grew substantially in February, raising fresh concerns that the country might resort to more policy tightening measures to cool its overheating economy.

According to the General Administration of Customs, exports surged up 45.7 percent year-on-year to $94.52 billion in February, while imports jumped 44.7 percent to $86.91 billion.

The major averages have seen additional upside in recent trading and are currently near their highs of the session. The Dow is up 33.11 points or 0.3 percent at 10,597.49, the Nasdaq is up 18.94 points or 0.8 percent at 2,359.62 and the S&P 500 is up 6.62 points or 0.6 percent at 1,147.06.

Sector News

Airline stocks are adding to their recent gains, with the NYSE Arca Airline Index up by 3.7 percent. The advance has lifted the index to a fresh two-year intraday high.

Banking stocks are also seeing a strong outing, as reflected by the 3 percent gain being shown by the Kbw Bank Index. With the upward move, the index has reached a fifteen-month intraday high.

The index is being helped by shares of Regions Financial (RF), which have jumped by 8.2 percent and broke out to their best intraday price in nearly a year earlier.

Semiconductor, steel, railroad and internet stocks are also on the rise, indicative of the day's broad-based buying interest.

Stocks Driven By Analyst Comments

Sonic (SONC) is moving higher in mid-morning trading after being upgraded at KeyBanc Capital Markets from Hold to Buy. The stock has gained 5.1 percent, setting a more than two-month intraday high in earlier trading.

CardioNet (BEAT) is also on the rise following an upgrade by Jefferies & Co from Underperform to Hold. The broker also raised its target price on the stock from $4 to $7. Shares are currently up by 4.5 percent, climbing to its best intraday price in nearly five months.

On the other hand, Annaly Capital Management Inc. (NLY) is sliding after being downgraded by JP Morgan Chase from Overweight to Neutral. The stock has lost 1 percent, pulling back off of yesterday's two and a half month closing high.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed little changed on Wednesday. Japan's benchmark Nikkei 225 Index slid less than a tenth of a percent, while Hong Kong's Hang Seng Index closed nearly flat.

Meanwhile, the major European markets are moving higher. The U.K.'s FTSE 100 Index is up by 0.6 percent, while the German DAX Index and the French CAC 40 Index are up by 0.7 percent and 0.8 percent, respectively.

In the bond markets, treasuries are weaker ahead of today's ten-year note offering. The yield on the benchmark ten-year note is trading at 3.739 percent, posting a gain of 3.8 basis points.

For comments and feedback: contact editorial@rttnews.com

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