Mid-Day Market Update

Shawshank, VA 9/28/2011 (PennyPayDay) – After closing higher in each of the three previous sessions, stocks are seeing some further upside in early trading on Wednesday. The major averages have all climbed firmly into positive territory, further offsetting the steep losses posted last week.

In the past few minutes, the major averages have pulled back off their highs for the young session, but they are holding on to notable gains. The Dow is up 107.47 points or 1 percent at 11,298.16, the Nasdaq is up 16.48 points or 0.7 percent at 2,563.31 and the S&P 500 is up 7.16 points or 0.6 percent at 1,182.54.

The markets continue to benefit from optimism about the financial situation in Europe, with European Commission President Jose Manuel Barroso calling on the European Central Bank to do "whatever is necessary" to ensure the financial stability of the euro zone.

Barroso also called for more flexibility and powers for the European rescue fund and proposed a financial transaction tax, which he described as a contribution to society from banks.

Meanwhile, traders have largely shrugged off the release of a report from the Commerce Department showing an unexpected drop in durable goods orders in the month of August.

The report showed that durable goods orders edged down by 0.1 percent in August after jumping by 4.1 percent in July. The modest decrease came as a surprise to economists, who had expected orders to increase by 0.2 percent.

Peter Boockvar, equity strategist at Miller Tabak, said, "Bottom line, August as we all know was when the global economy started to roll as Europe flared up, among other things, and today's August data was better than feared."

"This data point though is subject to large revisions and September business likely remained volatile so we need to see more months of data in what is now a new economic reality compared to pre-August numbers to draw any confident conclusions," he added.

Software stocks have shown a notable move to the upside in early trading, driving the NYSE Arca Software Index up by 1.4 percent. SAP (SAP) is helping to lead the sector higher, advancing by 3.2 percent to its best intraday level in almost a month.

Considerable strength is also visible among retail, oil, and pharmaceutical stocks. A majority of the other major sectors are also moving to the upside on the day, although most are showing relatively modest upward moves.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday despite a positive lead from Wall Street. Japan's Nikkei 225 Index edged up by 0.1 percent, while Hong Kong's Hang Seng Index dipped by 0.7 percent.

The major European markets have also turned mixed over the course of the trading day. While the German DAX Index is up by 0.4 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down by 0.2 percent and 0.7 percent, respectively.

In the bond market, treasuries are seeing modest strength following the weak durable goods orders data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.2 basis points at 1.994 percent.

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