(RTTNews) - After staging an early rally, stocks have settled firmly in positive territory in mid-afternoon trading on Tuesday. The strength in the markets is partly due to an increase in commodity prices, which is driving resource stocks higher.

With the election being held today, some traders are also expressing optimism that the uncertainty about who the next president will be will finally be erased by the end of the day. Most recent polls point to a victory for Democratic nominee Barack Obama.

In an interview with RTT News, Lou Brien, market strategist at DRW Trading in Chicago said that an Obama win is “at least somewhat priced into the market.” Brien believes the market is poised for a “good rally,” but stressed that he wouldn’t trust it in the longer-term.

On the earnings front, releases from MasterCard (MA), AutoDesk (ADSK), Archer Daniels Midland (ADM), and Marvel Entertainment (MVL) are helping to drive trading in the broader markets.

MasterCard reported significantly better-than-expected adjusted earnings for the quarter and is still showing strength with a gain of 14.2 percent. Meanwhile, AutoDesk announced preliminary financial results for the third quarter that came in significantly below analysts’ expectations.

While the Commerce Department released a disappointing factory orders report, many investors seem unphased as the broader markets continue to rise. The report showed that factory orders fell 2.5 percent in September compared to expectations for a more modest decrease of about 0.8 percent.

In other news, Dallas Federal Reserve Bank President Richard Fisher said that U.S. economy is navigating the “mother of all financial storms” in the wake of the financial crisis that has rocked the economy in the past couple months.

“Despite the efforts of the Fed, the hope that comes with a new presidency, and what will hopefully be responsible and carefully calibrated fiscal initiatives for the Congress, I believe we have an epic challenge ahead of us,” Fisher told the Texas Cattle Feeders Association in Grapevine, Texas.

The major averages are currently holding onto strong gains, although well off their best levels of the day. The Dow is currently up 219.27 at 9,539.10, the Nasdaq is up 40.91 at 1,767.24 and the S&P 500 is up 29.39 at 995.69.

Dow Components

The vast majority of the Dow components are trading in positive territory, contributing to the strong gain by the blue chip index. General Electric Co. (GE) is leading the advance with a gain of 7.7 percent on the day.

While the gain by General Electric comes in line with the advances in the broader market, the stock has taken advantage of the overall strength and climbed over resistance and to its highest intraday level in two weeks.

Another big gainer in the Dow is Caterpillar Inc. (CAT). After seeing a slight gain on Monday, Caterpillar is trading 6.4 percent higher. With the advance, the stock is climbing further off of the five-year closing low it set in late October.

Other Dow components posting notable gains include Chevron (CVX), AT&T (T), and Alcoa (AA). Shares of Chevron are currently up 5.4 percent, while shares of AT&T are up 5.2 percent and shares of Alcoa are up 5.1 percent.

Meanwhile, Hewlett-Packard (HPQ) is one of the few Dow components trading in negative territory, with the computer and printer maker currently down 2.4 percent. McDonald’s (MCD) is currently the only other Dow component in the red.

Sector News

As the major averages hold steady near their highs of the day, resource stocks continue to turn in some of the day’s best performances. Among resource stocks, those in the gold sector are showing some of the strongest gains of the day.

Currently, the Amex Gold Bugs Index is up 12.9 percent from Monday’s closing level. The advance has taken the stock further off of the five year closing low it set last Monday and to its highest intraday level in about two weeks.

Steel stocks are also posting strong gains, with the Amex Steel Index up 8 percent. Notable strength is also being shown by natural gas, oil service, and oil related stocks.

Outside of the resource sector, significant strength is being shown in the railroad sector, as reflected by the 5.2 percent gain by the Dow Jones Railroads Index.

A variety of other sectors have also shown strong upward moves, reflecting broad based strength in the markets. Some telecom, banking, and semiconductor stocks are posting notable gains.

Meanwhile, notable losses are being shown by healthcare provider and airline stocks. While the Morgan Stanley Healthcare Provider Index is down 4.2 percent, the Amex Airline Index is down 3.8 percent due in large part to an increase in the price of crude oil. Some weakness has also emerged in the biotech sector.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed mixed on Tuesday. After being closed for a public holiday on Monday, Japanese stocks jumped 6.3 percent on Tuesday. On the other hand, the Australian market closed slightly lower after the nation’s central bank cut interest rates.

Meanwhile, the major European markets all closed notably higher, ending the session near their highs of the day. The French CAC 40 Index and the German DAX Index closed up 4.6 percent and 5 percent, respectively, while the U.K.’s FTSE 100 Index posted a 4.4 percent gain.

In the bond markets, treasuries have climbed substantially higher after showing a lack of direction earlier in the day. Subsequently, the yield on the benchmark ten-year note is currently down 10.5 basis points at 3.799 percent.

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Posted in Categories: Australia, Economy, Eurozone, Japan, Releases, USA.

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