Eagle River, WI 10/12/2011 (PennyPayDay) – With traders expressing continued optimism about the European debt crisis, stocks have moved sharply higher in early trading on Wednesday. The major averages have all shown notable moves to the upside after ending the previous session mixed.Currently, the major averages are posting strong gains, just off their highs for the young session. The Dow is up 71.60 points or 0.6 percent at 11,487.90, the Nasdaq is up 29.23 points or 1.1 percent at 2,612.26 and the S&P 500 is up 11.00 points or 0.9 percent at 1,206.54.
The early strength on Wall Street is partly due to news that the European Commission has presented a roadmap outlining the steps that are needed restore confidence in the Euro area. Commission President Jose Manuel Barroso called for an agreement to be reached by October 23rd.
Barroso said, "This roadmap charts Europe's way out of the economic crisis. Reactive and piecemeal responses to different aspects of the crisis are no longer sufficient. We now need to get ahead of the curve."
"Confidence can be restored through an immediate deployment of all the elements needed to solve the crisis," he added. "Only in this way we will be able to convince our citizens, our global partners and the markets that we have the solutions that measure up to the challenges all economies are facing."
Earlier in the day, European Economic and Financial Affairs Commissioner Olli Rehn suggested that European officials are close to reaching a consensus on dealing with the debt crisis.
Speaking at the Irish Banking Federation's national conference in Dublin, Rehn said, "If we can agree on determined policy action, we have a good chance of not only averting a financial calamity, but to put Europe back to the path of sustained recovery."
Traders are also expressing optimism that the Slovak parliament will approve expanding the European Financial Stability Facility bailout fund in a second vote later this week.
Slovak opposition parties voted against the EFSF bill on Tuesday due to the fact that it was tied to vote of confidence in Prime Minister Iveta Radicova's government. Slovakia is the only country of the 17 euro members that has yet to approve the expansion of the EFSF.
Meanwhile, traders have largely shrugged off the release of weaker than expected earnings from aluminum giant Alcoa (AA), which reported third quarter income from continuing operations of $0.15 per share compared to analyst estimates for $0.22 per share.
The release of results from Alcoa, which is typically the first Dow component to report its quarterly results, is seen as the unofficial start of the earnings reporting season.
Steel stocks are seeing considerable strength in early trading, benefiting from easing concerns about the outlook for global demand. Reflecting the strength in the sector, the NYSE Arca Steel Index has surged up by 2.5 percent, extending a recent upward move.
Banking, healthcare, airline, and semiconductor stocks are also showing notable moves to the upside, moving higher along with most of the major sectors.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. While Japan's Nikkei 225 Index fell by 0.4 percent, the Hong Kong's Hang Seng Index rose by 1 percent.
Meanwhile, the major European markets have all moved to the upside on the day after seeing early weakness. The U.K.'s FTSE 100 Index is up by 0.6 percent, while the German DAX Index and the French CAC 40 Index are jumping by 1.7 percent and 2.2 percent, respectively.
In the bond market, treasuries are extending a recent downward move amid the optimism about Europe. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.7 basis points at 2.207 percent.
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