Northern, WI 9/20/2011 (PennyPayDay) – After showing a lack of direction in early trading, stocks have moved mostly higher over the course of the trading day on Tuesday. The major averages have climbed firmly into positive territory, offsetting the losses posted in the previous session.Currently, the major averages are posting strong gains, just off their best levels of the day. The Dow is up 129.84 points or 1.1 percent at 11,530.85, the Nasdaq is up 28.75 points or 1.1 percent at 2,641.58 and the S&P 500 is up 14.89 points or 1.2 percent at 1,218.98.
The markets are benefiting from optimism about the situation in Greece, with Greek Finance Minister Evangelos Venizelos due to hold another conference call with officials from the European Central Bank, European Commission and International Monetary Fund.
Venizelos called Monday's discussions with the officials "productive and substantive" as Greece seeks additional aid in an effort to avoid a default.
Optimism about further stimulus from the Federal Reserve has also generated some buying interest as the Federal Open Market Committee commences its two-day meeting.
Meanwhile, traders have largely shrugged off news that Standard & Poor's has downgraded Italy's sovereign debt rating by one notch due to weakening economic growth prospects.
News that the International Monetary Fund cut its global economic growth forecast has also not attracted much attention on Wall Street.
In its latest World Economic Outlook, the IMF forecast 4 percent global economic growth in both 2011 and 2012 compared to the 5 percent growth seen in 2010. The lender had previously forecast 4.3 percent growth for 2011 and a 4.5 percent expansion in 2012.
"The global economy is in a dangerous new phase," the IMF said. "Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing."
In U.S. economic news, the Commerce Department released a report showing a bigger than expected drop in housing starts in the month of August, although the report also showed an unexpected increase in building permits.
The report showed that housing starts in August came in at a seasonally adjusted annual rate of 571,000, a 5 percent drop from revised figures that showed 601,000 new housing starts in July. The housing numbers were significantly lower than the 592,000 that most economists had predicted.
However, new building permits for August, often a precursor to housing starts, came in at 620,000, on a seasonally adjusted annual basis, 3.2 percent higher than revised July figures. Most economists had expected new permits to come in at 590,000.
Gold stocks have shown a substantial move to the upside on the day, benefiting from a notable increase by the price of the precious metal. With gold for December delivery jumping $32.60 to $1,811.50 an ounce, the NYSE Arca Gold Bugs Index has surged up by 4 percent.
Significant strength has also emerged among utilities stocks, as reflected by the 1.9 percent gain being posted by the Dow Jones Utilities Average. NiSource (NI), Exelon (EXC), and PSEG (PEG) are turning in some of the sector's best performances.
Oil service stocks are also seeing considerable strength in mid-day trading, resulting in a 1.6 percent gain by the Philadelphia Oil Service Index. The strength in the sector comes amid an increase by the price of crude oil, with crude for October delivery climbing $1.38 to $87.08 a barrel.
Most of the other major sectors have also moved to the upside over the course of the trading day, with natural gas, biotechnology, and tobacco stocks posting notable gains.
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