(RTTNews) - Stocks are posting considerable gains in early afternoon trading on Monday, as the day’s positive economic reports has boosted buying interest. The major averages are all in positive territory, rebounding from last week’s string of disappointing sessions.

The strength in the markets is partly due to data from the Institute for Supply Management showing that manufacturing activity expanded for the third consecutive month in October amid a jump in production and employment.

Prompting further upside was news that pending home sales rose for a record straight eighth month in September, according to a report released by the National Association of Realtors, with the pending home sales index rising to its highest level since December of 2006.

Further, the amount of money spent on U.S. building projects unexpectedly climbed in September according to the Commerce Department, which reported a sharp jump in residential construction.

In other corporate news, troubled lender CIT Group Inc. (CIT) has filed for Chapter 11 bankruptcy protection. The company said on Sunday that its Board of Directors voted to proceed with the prepackaged plan of reorganization for the company and a subsidiary that would restructure its debt and streamline its capital structure.

The major averages have seen some downside in recent trading, backing further away from their best levels of the day. The Dow is currently up 79.81 at 9,792.54, the Nasdaq is up 8.95 at 2,054.06 and the S&P 500 is up 7.02 at 1,043.21.

Sector News

Biotechnology stocks continue to turn in some of the day’s best performances, with the NYSE Arca Biotechnology Index advancing by 4 percent. The index is bouncing off of the three-month closing low set on Friday.

Healthcare provider stocks are also moving notably higher, with the Morgan Stanley Healthcare Provider Index posting a gain of 1.6 percent. The advance is helping the index to recover from Friday’s seven-week closing low.

Community Health Systems, Inc. (CYH) is one of the sector leaders, climbing by 4.8 percent. Despite the strong gain, the stock continues to trade in a range.

Gold stocks are also holding onto strong gains, with the NYSE Arca Gold Bugs Index currently up by 2.1 percent. The strength among gold stocks comes amid a rebound in the price of the precious metal in commodities trading.

Railroad, electronic storage, banking and oil service stocks are also on the rise, reflecting the day’s broad based strength.

Stocks In The News

Encore Acquisition Co. (EAC) is surging higher on news that the firm will be acquired by Denbury Resources Inc. (DNR) for $4.5 billion. The stock has jumped by 21.4 percent, reaching its highest intraday price in over a year.

Ford (F) is also on the rise after reporting third-quarter net income of $0.29 per share, firmly beating the expected loss of $0.12 per share. Revenue for the quarter came in at $30.9 billion, topping the forecast of $28.32 billion for the quarter. The stock is currently up by 8 percent, but it remains in a range.

On the other hand, Dean Foods Co. (DF) is moving lower after the company reported third quarter revenues that fell short of analyst estimates. The stock is falling by 8.2 percent, hitting its lowest intraday price in over ten months earlier in the session.

In Focus: Economic News

As mentioned above, the ISM said its index of activity in the manufacturing sector rose to 55.7 in October from 52.6 in September, with a reading above 50 indicating growth in the sector. Economists had been expecting a more modest increase by the index to a reading of 53.0.

Separately, the National Association Of Realtors reported its headline pending home sales index rose 6.1 percent to 110.1 in September from a reading of 103.8 in August. The increase in the index came as a surprise to economists, who had expected the index to edge down 0.1 percent.

The U.S. Commerce Department revealed that construction spending rose 0.8 percent in September, following a 0.1 percent decline in August and a 1.2 percent slide in July.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed lower on Monday. Japan’s benchmark Nikkei 225 Index fell by 2.3 percent on the day, while Hong Kong’s Hang Seng Index lost 0.6 percent.

Meanwhile, the major European markets closed on the upside. The U.K.’s FTSE 100 and the French CAC 40 Index rose by 1.2 percent and 0.9 percent, respectively, while the German DAX Index gained 0.3 percent.

In the bond markets, treasuries are seeing weakness amid the rally on Wall Street. The benchmark ten-year yield is trading at 3.407 percent, posting a gain of 1.5 basis points.

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

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