(RTTNews) - Stocks are posting strong gains in mid-morning trading on Monday, as traders have funneled capital into the equity markets following a string of largely positive economic reports. The major averages are all in positive territory, looking to offset some of last week’s losses.

The Institute for Supply Management released its report on manufacturing activity in the month of October, showing that activity expanded for the third consecutive month amid a jump in production and employment.

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.

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.

The 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.

Separately, 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.

This afternoon, White House economic adviser Lawrence Summers will gather with a number of other government officials to discuss the state of the economy, job creation and means of achieving consistent growth following the recession. The meeting is scheduled to take place at 2 p.m. ET.

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 choppy movement in recent trading, holding near their best levels of the day. The Dow is currently up 127.65 at 9,840.38, the Nasdaq is up 19.98 at 2,065.09 and the S&P 500 is up 14.05 at 1,050.24.

Sector News

Biotechnology stocks are turning in some of the day’s best performances, with the NYSE Arca Biotechnology Index advancing by 4.5 percent. The index is bouncing off of the three month closing low set on Friday.

Shares of Human Genome Sciences (HGSI) are boosting the sector, with the stock surging up by 35.3 percent. The advance has lifted shares to their best intraday level in nearly eight years. The gain comes after the firm announced that its lupus treatment Benlysta met the primary endpoint in the second of two Phase 3 trials.

Gold and steel stocks are also moving notably higher, with the NYSE Arca Gold Bugs Index and the NYSE Arca Steel Index posting gains of 3.6 percent and 3.7 percent, respectively. The strength in gold stocks comes amid a jump in the price of the precious metal.

Banking, oil service, railroad, healthcare provider and natural gas stocks are also seeing significant strength, reflecting the day’s broad based rally.

Stocks Driven By Analyst Comments

Domtar (UFS) is moving considerably higher in mid-morning trading after the stock was upgraded by JP Morgan Chase to Overweight from Neutral. The stock is currently up by 8.8 percent, reaching its best intraday level in over a year at its highs of the session.

Motorola (MOT) is also on the rise following an upgrade by Citigroup from Hold to Buy. The broker also raised the firm’s target price to $10.50 from $9. The stock is advancing by 4.1 percent, setting a six week intraday high.

On the other hand, Research In Motion (RIMM) is retreating after being downgraded to Sell from Buy by Citigroup, which also reduced its target price on the stock to $50 from $100. Shares are down by 4.5 percent, setting a seven month intraday low.

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 are moving higher. The U.K.’s FTSE 100 and the French CAC 40 Index are up by 0.9 percent and 1.2 percent, respectively, while the German DAX Index is up by 0.7 percent.

In the bond markets, treasuries are seeing weakness amid the rally on Wall Street. The benchmark ten-year yield is trading at 3.433 percent, posting a gain of 4.1 basis points.

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

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