(RTTNews) - Stocks are showing gains during mid-afternoon action on Tuesday, making little further progress on the mixed bag of economic and corporate news that drove earlier trading.
Experts are taking the advance, a return to upward momentum after a bout of profit-taking on Monday, with a grain of salt, looking for a clear change in sentiment before declaring a definite end to the bear market that ravaged stocks in 2008.

In an interview with RTT News, Donald Selkin, chief investment strategist at National Securities discussed the market’s early, but modest, gains today despite reports confirming the economy is “still in the throes of a deep recession.” Selkin said the market is “looking beyond the horizon to better days ahead,” but warned that until we develop a clear uptrend, “yes, it’s a bear market.”

Selkin says he is “not overly bullish,” but predicts the averages could post gains of 15 percent this year.
The Dow is up 76.23 at 9,029.12, while the Nasdaq is up 26.34 at 1,654.37 and the S&P 500 is posting a gain of 8.37 at 935.82.

In the morning, an ambiguous set of economic data was released. A closely-watched survey showed an improvement in the country’s services industries during December, though the sector of the economy remained in a contraction. Meanwhile, factory orders - a key gauge for the health of the manufacturing sector - showed a sharper-than-expected decline for November.

Traders also had an eye on Washington, where the new Congress was sworn in, and will presumably begin working on an economic stimulus package. Also, President-elect Barack Obama met with his top economic advisors, promising afterwards that he would avoid earmarks in the stimulus bill.

The Institute for Supply Management released its report on activity in the services sector in the month of December, with the index of activity in the sector unexpectedly rising to 40.6 from a record low reading of 37.3 in November.

Meanwhile, the government issued its report on November factory orders, showing a decline of 4.6 percent following a revised 6.0 percent decrease in October. Factory orders were expected to show a more modest 2.6 percent decline in November.

Weakness was also seen in pending home sales, as a report released by the National Association of Realtors illustrated showed that pending home sales fell by 4 percent in November to a record low.

Meanwhile, President-elect Obama is working feverishly in the remaining weeks before his inauguration to get a head start on his economic stimulus plan, aiming for bipartisan support in the face of a severe recession.

The president-elect met with both Democrat and Republican lawmakers Monday to discuss his proposed package, aiming at a swift passage following his inauguration on January 20th.

“We may have disagreements, but I think it’s going to be possible for us to work out those disagreements in the atmosphere of civility and comity,” Obama said at the meeting. “The American people, I think, are counting on us to act swiftly, boldly, but responsibly, in dealing with these issues.”

Dow Components
While the blue chip average is only posting modest gains on the day, many of its components are significantly higher. One of the best performers in the average is Hewlett-Packard (HPQ) which is posting a gain of 7 percent following the unveiling of new products.

HP released the new slate of products just ahead of the opening of CES 2009, the world’s largest annual tradeshow for consumer technology, including thin and light consumer notebooks, a high-performance desktop, a business mini PC, and a photo printing application for the Apple iPhone.

With the subsequent advance in the stock price, shares are trading at their highest level in two months.

General Motors (GM), DuPont (DD), and Citigroup (C) are also posting substantial gains, up 7.3 percent, 3.7 percent, and 5.7 percent, respectively.

At the other end of the spectrum, Merck (MRK) is turning in one of the worst performances of the day with a loss of 2.1 percent. Similarly, fellow drugmaker Pfizer (PFE) is posting a notable decline, as pharmaceuticals suffer as a whole.

Verizon (VZ), McDonald’s (MCD), and Coca-Cola (KO) are also posting moderate losses on the day.

Sector News
With the help of the notable gain shown by Hewlett-Packard and substantial advances in share prices for Sun Microsystems (JAVA) and Western Digital (WDC) - up 14.8 percent and 18.1 percent, respectively - computer hardware stocks are turning in some of the best performances of the day.

Currently, the Amex Computer Hardware Index is up 7.2 percent on the day, taking the index to its highest level in just over two months.

Other significant increases are being shown by steel, electronic storage, and oil services stocks.

Meanwhile, tobacco and utility stocks continue to turn in some of the day’s worst performances, with the Amex Tobacco Index down 1.5 percent and the Philadelphia Utility Index down 0.6 percent.

Other Markets
In overseas trading, the major markets across the Asia-Pacific region closed mostly higher on Tuesday, with the Japanese Nikkei 225 index finishing with a gain of 0.4 percent.

The major European markets also ended the session with notable gains. While the French CAC 40 Index and the German DAX Index closed up 1.1 percent and 0.9 percent, respectively, the U.K.’s FTSE 100 Index posted a gain of 1.3 percent.

In the bond market, treasuries have moved higher and broken into positive territory. Subsequently, the yield on the benchmark ten-year note is down 1.4 basis points at 2.474 percent.

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

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