Stocks Modestly Higher After Jump In Home Builder ConfidenceStocks are showing modest upside in mid-morning trading on Monday, with traders reacting to a better than expected reading on home builder confidence and a string of upbeat earnings reports including banking giant Citigroup.
The major averages have all seen some downside in recent dealing, slipping off of their session highs. TheDow is up 45.68 points at 11,108.46, the Nasdaq is up by 2.74 points at 2,471.51 and the S&P 500 is up by 2.86 points at 1,179.05.
A short time ago, the National Association of Home Builders said that its home builder confidence index moved up to 16 in October after last month's reading of 13. The upward move also defied forecasts for the index to remain at 13. The increase came as market conditions, sales projections and consumer prospects all showed gains.
Just before the start of trading, the Federal Reserve reported that industrial production unexpectedly declined in September. The headline number showed a drop-off of 0.2 percent compared to the 0.2 percent uptick recorded in August.
The fall surprised economists who had forecast an increase of 0.2 percent, while the figure also marked the first fall in production after six months of increases.
The report also showed that capacity utilization inched down to 74.7 percent in September from 74.8 percent in August. Initial forecasts looked for the figure to remain flat at 74.8 percent.
In earnings news, Citigroup Inc. released third quarter results showing net income of $0.07 per share compared to a loss last year, while edging out estimates for $0.06 per share for the quarter. The firm was able to turn a profit following a significant reduction in provisions for credit losses.
Revenues for the quarter came in at $20.74 billion, short of revenue estimates of $21.15 billion for the quarter.
Halliburton Company reported third-quarter net income of $0.60 per share, above EPS estimates for $0.55 for the quarter. Total revenues were $4.67 billion, also beating expectations which called for $4.63 billion for the period.
Hasbro Inc. posted third-quarter net earnings of $1.09 per share, topping projections for $1.04 per share for the quarter. Net revenues rose 3 percent to $1.31 billion, also coming in above estimates which called for $1.29 billion in revenues for the quarter.
In other corporate news, oil giant BP Plc said it has agreed to sell its upstream businesses and associated interests in Venezuela and Vietnam to TNK-BP - Russia's third largest oil firm - for $1.8 billion in cash.
Northeast Utilities agreed to acquire rival NSTAR in a stock for stock merger, a total value of $9.5 billion. The merger is expected to result in a combined entity with a total value of $17.5 billion.
Cardiovascular medical devices manufacturer St. Jude Medical, Inc. announced that it has agreed to acquire AGA Medical Holdings, Inc. for $20.80 per share in a cash and stock deal valued at about $1.3 billion, including the assumption of about $225 million in outstanding debt.
Sector NewsBanking stocks are seeing notable gains in mid-morning trading, helped by upbeat reaction to earnings from Citi. The KBW Bank Index is posting a gain of 1.9 percent, bouncing back from Friday's five-week closing low.
Utility, natural gas and healthcare provider stocks are also seeing gains, but are seeing much more restrained buying interest.
Meanwhile, semiconductor stocks are under pressure, driving the Philadelphia Semiconductor Index down by 1.2 percent off of the two and a half month closing high set on Friday.
Stocks Driven By Analyst Comments
Jack In The Box is higher after being upgraded at RBC Capital Markets from Sector Perform to Outperform. The broker also raised its target on the stock from $22 to $28. The stock has gained 2.1 percent and is on pace for its best closing price in five and a half months.
Trimble Navigation is also on the upside after analysts at Wedbush raised their rating on the stock from Underperform to Neutral, while boosting the price target from $25 to $34. Shares are up by 0.7 percent and were on target earlier for their highest close in two and a half years.
On the other hand, Altera is down after RBC Capital Markets dropped its rating on the stock from Outperform to Sector Perform and lowered its target from $34 to $30. The stock is posting a loss of 1.7 percent and is looking for its lowest close in three weeks.
Overseas, stock markets in the Asia-Pacific region ended mostly lower on Monday. Japan's benchmarkNikkei 225 Index slid by less than 0.1 percent, while Hong Kong's Hang Seng Index fell by 1.2 percent.
The major European markets are largely on the upside. The German DAX Index and the U.K.'s FTSE 100 Index are both up by 0.6 percent, while the French CAC 40 Index is up by 0.2 percent.
In the bond markets, treasuries are modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 2.527 percent, posting a loss of 4.9 basis points.