(RTTNews) - Stocks are seeing considerable strength in mid-morning trading on Monday, as economic optimism from overseas has permeated trader sentiment in the U.S. The major averages are all in positive territory, with the Dow reaching a one-year high.

Some of the gains in the markets have come amid notable upside in overseas stocks after the G20 finance ministers indicated that their economic stimulus measures would remain in place until the global economic recovery is assured.

With no major economic data slated for release on the day, traders have also looked to some corporate news to drive trading.

In response to Kraft Foods Inc.’s (KFT) formal offer, Cadbury Plc (CBY), recommended that its shareholders reject the offer, stating it “is worse than the proposal that the Board has previously rejected as fundamentally undervaluing Cadbury and its prospects.”

Earlier in the day, Dish Network (DISH) reported third quarter net income of $81 million, compared with $92 million in the corresponding period in 2008. Total revenue was $2.892 billion, down 1.5 percent from $2.937 billion in the year-ago quarter.

In other news, defense contractor Northrop Grumman (NOC) announced that it has agreed to sell its advisory services business TASC, Inc. to consortium led by General Atlantic LLC and affiliates of Kohlberg Kravis Roberts for $1.65 billion in cash.

The major averages have seen little change in recent dealing, holding near their highs of the day. The Dow is currently up 125.60 at 10,149.02, the Nasdaq is up 29.49 at 2,141.93 and the S&P 500 is up 14.17 at 1,083.47.

Sector News

Resource stocks are turning in strong performances in mid-morning trading, with gold stocks pushing the NYSE Arca Gold Bugs Index up by 4.5 percent. The gain has lifted the index to its best intraday level in roughly fifteen months.

The strength among gold stocks comes as the price of the precious metal has continued to rally to record levels. December gold is currently at $1,106.90 per ounce, a gain of $11.10 on the session. Prices reached as high as $1,111.70 an ounce, a record high.

Meanwhile, the dollar fell below $1.50 versus the euro and approached a 15-month low. The greenback fell to a three-month low against the pound.

The weakness in the dollar comes after U.S. Treasury Secretary Tim Geithner said at the G20 Finance Ministers meeting in Scotland that economic stimulus measures must be kept in place until the global economic recovery is secured.

Electronic storage, airline, semiconductor and commercial real estate stocks are also moving higher by strong margins, reflecting the day’s broad based rally.

Despite the sizable gains by most sectors on the day, a majority remain in a range as they recoup some of their recent losses.

Stocks Driven By Analyst Comments

Revlon (REV) is surging higher in mid-morning trading after being upgraded by BMO Capital Markets from Market Perform to Outperform. The stock is currently up by 25.7 percent, reaching a one-year intraday high.

Hercules Offshore (HERO) is also on the rise following an upgrade by Credit Suisse from Neutral to Outperform. The broker also raised the target price on the stock from $5 to $7. The stock has jumped by 11.7 percent, although it remains in a trading range.

On the other hand, VeriSign (VRSN) is moving lower after being downgraded by Goldman Sachs to Sell. The broker cited the firm’s legal overhang and uncertain margins as reasons for the downgrade. The stock has slipped by 2.8 percent, although it remains in a range.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed higher on Monday. Japan’s benchmark Nikkei 225 Index edged up by 0.2 percent, while Hong Kong’s Hang Seng Index advanced 1.7 percent.

The major European markets are also moving notably higher, with the U.K.’s FTSE 100, the French CAC 40 Index and the German DAX Index all up just over 2 percent.

In the bond markets, treasuries are little changed ahead of today’s $40.0 billion three-year note auction. Subsequently, the yield on the benchmark ten-year note is holding at 3.499 percent.

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

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