Stocks Moving Back To The Upside In Morning Trading – U.S. Commentary

After coming under pressure last Friday, stocks have moved back to the upside in morning trading on Monday. The major averages have all climbed into positive territory, although buying interest has remained somewhat subdued.

Currently, the major averages are off their highs of the session but holding on to gains. The Dow is up 20.70 points or 0.1 percent at 25,333.84, the Nasdaq is up 44.89 points or 0.6 percent at 7,884.00 and the S&P 500 is up 8.10 points or 0.3 percent at 2,841.38.

The rebound on Wall Street may partly reflect easing concerns about the financial crisis in Turkey, which weighed on the markets in the previous session.

In a research note, Canaccord Genuity asset class strategist Brian Reynolds predicted the Turkish panic would be less impactful than the Greek financial panic circa 2010-2011.

Reynolds noted Turkey’s external debt, at $447 billion, is only about three-quarters of Greece’s when that country ran into trouble.

Additionally, Reynolds said Greek external debt was about 4 percent of U.S. GDP in 2010 and less than 11 percent of the U.S. public credit market, while Turkish external debt currently represents less than 2.5 percent of U.S. GDP and just over 5 percent of the U.S. public credit market.

Reynolds subsequently said, “The U.S. credit boom is likely going to persist and eventually take stocks higher after worries over this situation crest.”

The Turkish lira hit a new record low against the U.S. dollar in Asian trading before regaining some ground after Turkey’s central bank took measures to boost liquidity in the foreign exchange market.

Over the weekend, Turkish Finance Minister Berat Albayrak announced the government plans to calm the highly volatile financial markets.

A report from Reuters noted Albayrak pledged to take “necessary steps” but did not provide details on what those steps included.

Trading activity has remained somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

The economic calendar picks up in the coming days with the release of reports on import and export prices, retail sales, industrial production, homebuilder confidence, housing starts, and consumer sentiment.

Telecom and semiconductor stocks have moved notably higher in morning trading, while weakness is visible among gold, oil service, and housing stocks.

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Monday. Japan’s Nikkei 225 Index plunged by 2 percent, while Hong Kong’s Hang Seng Index tumbled by 1.5 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index has inched up by 0.1 percent, the U.K.’s FTSE 100 Index is down by 0.3 percent and the German DAX Index is down by 0.4 percent.

In the bond market, treasuries are giving back ground after moving notably higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.7 basis points at 2.884 percent.

by RTTNews Staff Writer

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