(RTTNews) - After seeing substantial weakness in the previous session, stocks are posting notable gains during morning trading on Friday. The strength comes as investors, driven by some positive corporate news, are seeking out bargains and trying to pick the bottom of the market.

In corporate news, Dell (DELL) reported net income for the third quarter that came in better than expected despite missing the revenue figure anticipated by analysts.

At the same time, Gap (GPS) reported third quarter net income of $0.35 per share, compared to $0.30 per share in the third quarter last year. Net sales fell to $3.6 billion as comparable store sales decreased 12 percent.

Analysts expected the apparel retailer to earn a slightly lower $0.34 per share for the quarter on revenues of $3.57 billion. Gap also reaffirmed that it expects full year GAAP earnings in line with Wall Street expectations.

Meanwhile, Heinz (HNZ) reported second quarter net earnings that came in better than expected on revenues that just missed analysts’ estimates. Heinz also reaffirmed its fiscal 2009 guidance for organic sales and for EPS.

In other news, Citigroup (C) is exploring the possibility of selling parts of the company or an outright sale following the plunge in its stock price, the Wall Street Journal reported Thursday, citing people familiar with the matter. The news comes after the financial services giant saw its stock plunge 26 percent last session.

While there are no major economic reports due to be released today, Philadelphia Federal Reserve President Charles Plosser is scheduled to speak about the financial crisis at 11:10 AM ET, while Chicago Fed President Charles Evans is due to speak to economists at 12:40 PM.

The major averages are currently holding onto moderate gains, well off their best levels of the day. The Dow is currently up 68.25 at 7,620.54, the Nasdaq is up 12.02 at 1,328.14 and the S&P 500 is up 7.48 at 759.92.

Sector News

With the notable strength in the broader markets, the majority of the major sectors are showing strong gains so far. Some of the biggest gains are coming from the gold sector as the price of gold climbs $24.40 at $773.10 to an ounce.

With the advance by the price of gold, the Amex Gold Bugs Index is up 11.6 percent, helped by a 16.3 percent gain by Coeur d’Alene Mines (CDE). With the advance, Coeur d’Alene has bounced off of the multi-decade closing low that it set yesterday.

Substantial gains are also being shown in steel, oil, natural gas, and airline stocks, with the Amex Steel Index up 8.1 percent and the Amex Oil Index up 4.5 percent, while the Amex Natural Gas and Amex Airline Indices are up 3.5 percent and 2.2 percent, respectively.

The substantial increases in the resource stocks come as many of the major commodities are seeing price increase. Crude oil is up $0.33 at $49.75 a barrel, while natural gas is up $0.126 at $6.442 per million BTUs.

At the other end of the spectrum, banking and biotech stocks are turning in some of the worst performances of the day. Currently, the KBW Bank Sector Index is down 5.7 percent, while the Amex Biotechnology Index is down 3.6 percent.

Healthcare provider, health insurance, and housing stocks are also posting modest losses.

Stocks Driven By Analyst Comments

BioMarin (BMRN) was upgraded to a Buy rating at Citigroup, along with other similar stocks. Citigroup said that the sector is not cyclical and earnings expectations appear reasonable for the upcoming quarter.

With the upgrade, the stock is posting a gain of 8.1 percent on the day, which has lifted it off of the two-year closing low it set in the previous session.

Limited Brands (LTD) was also upgraded by Citigroup, from a rating of Hold to Buy. The rating change came as Citigroup noted that the company has an 8% yield with solid liquidity and has no major debt coming due in the near future. Currently, the stock is posting a gain of 2.7 percent on the day.

Meanwhile, Celanese (CE) was downgraded at Citigroup to a Hold rating, as the company’s Chinese exposure is expected to drive its 2009 earnings lower. With the downgrade, the stock is posting a loss of 21.4 percent.

Other Markets

In overseas trading, the stock markets in the Asia-Pacific region closed mostly higher on Friday, ending a four-day losing streak. Japan’s benchmark Nikkei 225 index ended the session with a gain of 2.7 percent.

On the other hand, the major European markets have turned lower after seeing earlier strength. The French CAC 40 Index and the German DAX Index are currently down 2 percent and 1 percent, respectively, while the U.K.’s FTSE 100 Index is posting a modest loss of 1.2 percent.

In the bond markets, treasuries are giving back some ground after seeing substantial strength in the previous session. Subsequently, the yield on the benchmark ten-year note is currently up 5.2 basis points at 3.196 percent.

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

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